Help kids make the most of their Christmas money

When Christmas has come and gone, kids can be excited by their gifts of Christmas money.  A little guidance now can go a long way to teaching smart money choices.

Is your child a saver or a spender?

Assuming your child is old enough to understand the value of money and what it can do for them, it’s likely they are going to fall into one of three camps:

  1. They have no specific spending goals, and just like to save money.
  2. They know what they want to spend their money on and probably asked for money to bring them closer to their goal.
  3. They have no specific saving or spending goals, and their money might evaporate on lollies and trinkets.

Time for a bank account

If you haven’t set up one already, it’s a good time to get them involved in setting up their own bank account. No matter what type of saver or spender your child is now, a bank account is a good idea for:

  • security: money safely tucked into a bank account is safer than cash laying around the bedroom (it might get lost in the mess or be hidden so well it can’t be found)
  • impulse control: money in a bank account reduces the danger of impulse spending. A bank account puts some thinking space between wanting something and getting it immediately
  • tracking: kids can easily see how much money they have in their account, and track money coming in and out.

For the savers

For a child who instinctively understands the value of saving, all you really need to do is provide them with a bank account and the ability to track their savings. Depending on their age, you may want to introduce them to the idea of short and long-term savings, and even open a high-interest savings account for them so that their money works harder for them.

For the ‘saving up’ savers

For the child who already knows what they want to buy, safely depositing their Christmas money in a bank account is the first step. It’s a chance to teach them the art of smart shopping¾research, price comparison, safe online shopping and how to avoid being scammed. If a deal looks too good to be true, it probably is.

For the spenders

If you have a child whose money tends to disappear with little to show for it, you can try a couple of different approaches depending on their age.

For primary school ages, Elmo’s 3 jar idea is a good one: For You, For Me, For Later. The money for you is for sharing and can go towards a cause they care about, like animal rescue or helping other children. The money for me is money they can spend on whatever they like¾it’s important to let them make spending mistakes and learn from them. The money for later is their savings, and it might be helpful if that goes straight into the bank. Make sure you include them in these decisions¾after all, it’s their money.

For older children, you can apply the same principles on a more sophisticated level. Not mentioning Elmo will be a good start! Suggest they tuck an agreed amount in their bank account, and leave it there until they have something they really want to spend it on. If they’re

Lessons for life

If you teach your kids how to manage their money now when it doesn't matter so much, they'll have fewer lessons to learn the hard way when they leave home and budget choices can be more serious. Helping your kids make good decisions with their Christmas money is a great place to start.

Ready for their first bank account?

The QBANK team loves to help set up first bank accounts, or find the right one for your child. We’ll take you through everything you need to get the account up and running. Call 13 77 28.

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Budgeting

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