Many parents missing mark in teaching kids how to save

Sydney mother of three Julia Thomas is the first to admit she could have approached financial literacy with her children with greater consistency.

While her 12, 15 and 25-year-old children were asked to do jobs around the house to receive pocket money, she didn’t teach them how to effectively save a good percentage of the cash they earned.

“The kids do save a little, but we haven’t really thought about the concept of teaching them fully about money management,” she says.

Julia is not alone. Research reveals that the majority of Australian parents are missing the mark when it comes to teaching their kids everything they need to know about their money.

Many parents focus on restricting spending rather than saving. More than half encourage their children to save pocket money for purchases, which helps instil some appreciation for savings, but the concept is built on purchases and is not ideal to foster good long-term savings habits.

According to research conducted by investment app Raiz Invest, about 40 per cent of adults surveyed believed that their own parents could have done more to teach them good financial habits.

Raiz managing director George Lucas says the data indicate the importance of starting early and talking openly about money with kids.

“It’s common for Australians to focus on expenditures, which are important. But investing and finding the best rates for savings are also important,” Lucas said.

“Many consumers are unaware of the interest rate they’re earning on their bank savings, and they often lack practical tools for investing,” he says. “They are unaware of the best options for protecting and growing their income.”

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Source: Many parents missing mark in teaching kids how to save