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Hands up who has spent countless hours with their toddlers playing pretend shops?
And who has pretend money in their toy boxes?
Congratulations, because that is just the way to help educate your children from an early age about the concept and value of money.
Children under five are not too young to learn about money and how to save it, according to expert finance commentator Noel Whittaker.
With a successful financial advisory career spanning decades, and with many books on investment published, Mr Whittaker also has eight grandchildren under eight and takes their financial literacy seriously.
“I’m amazed at how savvy kids actually are about money, they are really very, very smart,” he says.
Playing make believe shops with your children, using a toy cash register and setting them small tasks to do in exchange for money or a toy are all great ideas to get them thinking about the value of money, according to Whittaker.
“I like piggy banks and think they are one of the great savings tools,” he says.
Collecting your spare change every week and getting your children involved in counting it out is a great place to start.
“Let them count it with you and divide it up into piles; some to spend, some to save and some to give away,” he says.
“Eventually kids do have to learn about the concept of money and know that money doesn’t just come from nowhere, everyone has to earn it.”
“So for children under five, even if you set them small tasks like helping you make the bed, I think it all helps them,” he says.
Brisbane mother Elizabeth Quinn, 32 has three children who are five, three and one and she has worked hard to help them learn about money from an early age.
Being open and upfront about money and how much things cost when she’s with her children is very important, she says.
“I start conversations with my children when we are going into the shops about what we are getting and how much money it will cost,” she says.
“And then if they ask for something else, when I say “no, mummy doesn’t have any more money’, they seem to understand that is final and they stop asking.
“I think they realise that you can’t really debate that because when the money runs out, it’s run out.”
Introducing money boxes and wallets early, were other great methods, she says.
“We have these money boxes with a section for money you can spend, another section for money you can save and another section for money you can share,” she says.
“It is helping them realise if there is something they really want they can save up for it and take their wallet out with their own money and buy it. It’s really getting them to be responsible with their own money from early on.”
“The kids also love it,” she says.
Doing a regular cull of your household possessions and getting your children involved was another way she has encouraged her children to think about the value of things.
“Every year I go through the house with the kids and work out what toys they want to keep and what toys they want to give way to someone else.”
Elizabeth’s final tip was roll modelling saving for things like family holidays or other special family items.
Her family uses the Acorns Australia app, which encourages users to either invest in regular and small amounts, invest using large lump sums, or users can opt for the Round Up service which invests the change from your daily purchases, so if you buy a coffee for $4.60 it will take the extra 40 cents and put it into your investment account.
“I use this really good savings tool called Acorns Australia and if my husband and I decide we want to take the kids on a holiday in a year’s time we set it up to take out say $5 a day,” she says.
“Most of the time you don’t even notice $5 a day leaving your account, but if you do you can change it and pull it back,” she says.