By Frank Conway, Nov 14 2017 07:14PM
Christmas is a special time. It is a time that Irish families splurge and spend. In fact, the average Irish family is estimated to spend approximately €1500 buying gifts and preparing for this special season.
With all of this spending, it is also a great time to teach young ones about savings and money management.
So, here are the MoneyWhizz top tips to using the Christmas season to teach kids about money:
1. Ready, set...challenge, the money challenge that is! Keep it simple. For younger children, keep the money challenge very easy to achieve. For example, for children aged 3 – 4, get them to collect a 10cent euro coin from every country in the Eurozone, it can be a lot of fun. If your child is a little older, set a specific money challenge for something they wish to purchase.
2. Time it – and with any good money challenge, put a timeframe on it, it really will add to the excitement!
3. Do the money split. No! We’re not talking gymnastics. We’re talking about giving your child two separate money boxes...and name each one; 'spending' and 'saving'. It would be better still if you could colour-code the boxes, GREEN for savings and RED for spending (as in STOP spending! - you get my drift!). Lead by example, have a money box of your own and work towards the money goal together!
4. Piggy Banks It seems obvious, but a cute saving box can be a really great way to encourage your little ones to put aside some money. Try to find one that your child will treasure...and difficult to open!!!
5. Little rewards - why not link savings with easy around-the-house tasks and reward them each time that task is done. Not only is this a great way to link money to earnings (a lesson for the future) but is also means they have a way of reaching their savings goal.
6. Visualise it - Make a special savings chart using a calendar so that if they are on target with their savings goal, they can also see it. This will spur then on the closer and closer to their ultimate goal. This is also an important step even for adults!
7. Ca-ching time! - If your little one is being really brilliant with their money, and saving all they can - why not reward them? Perhaps it could be a sleepover with their pals. Or, if they are ahead on their savings goal, make a little extra money top-up just to show you are proud of them...a bit like the old SSIA programme.
8. Give them a glass money jar...and give it a name. So, if you call the jar “Jingles”, then you can have a lot of fun asking your child if they fed Jingles today. Get them to place Jingles in their bedroom and whatever money they find down the back of the chair let them keep, so long as they aren’t going to spend it, yet.
9. Money nursery – the great thing about a savings account is money is placed out of the temptation of spending. So, if your child likes a little bit of excitement, why not open savings account. Now I know you said that banks and credit unions don’t pay interest on savings but some do. The best deal on the market is the Youth Saver Account at BoI. It pays 2.5% . Remember, while the bank pays, Government takes away so even the youngsters will have to cough up a whopping 39% DIRT (reducing to 37% in 2018) on and interest they earn...but savings are not just about interest, they are about the discipline of putting some extra cash aside. (Disclaimer – MoneyWhizz works on a financial education collaboration with BoI in primary schools). And with that all those savings, maybe those kids will actually have the cash to buy Ireland and island one day!!!
10. It’s their money, make it count Children as young as 3 learn to understand money and by age 7, can start to form money habits so it is important to get them on the right money track early. With savings, they can learn so many great habits!
Happy savings, happy learning and happy Christmas!