Rebecca’s top tips on growing financially resilient kids

“Money & You: The Lost Generation?” was the name of the report released from the financial Service Council in April 2022, which reviewed the financial confidence and wellbeing of New Zealanders. The study highlighted overall young New Zealanders between the ages of 18-39, previously coined “Generation-Rent”, are unconfident in the economy as the cost of living rises and price rises are the fastest since 1990. This age group are more concerned about financial issues like housing prices and interest rates and inflation than other generations, and are much more likely to worry about money. 68% are worried about wage stagnation and in the instance of loss of income 33% could continue their current lifestyle for less than 1 month and 39% for less than 6 months. 42% don’t have emergency savings of $5,000 without going into debt. These results are harrowing, so the question remains, what can we do to help prepare the next generation for their financial future and wellbeing? Being in the financial services industry and having raised two children I have put together my top tips on growing financially savvy kids.  

1. Open up the conversation around money: Ideas around money and how to manage it can be put into everyday conversations so that kids learn by osmosis.
2. Make saving up fun: An old-fashioned piggy bank or a digital wallet can help develop the idea that good stuff is worth saving for and instant gratification isn’t all it’s cracked up to be. Getting something meaningful that you have saved hard for has a longer lasting feeling of achievement. SquareOne is a simple digital pocket money and debit card facility.
3. Teach them how it works: The earlier we start incorporating ideas about money and how it works the more likely we are to stick with the process throughout life. Give them opportunities to earn extra pocket money, especially if they are working towards saving for something special. Through SquareOne you can “pay” your child instantly for doing chores and they can split their money into different accounts and set savings goals.
4. Discuss the differences between good and bad debt: For teenagers understanding the differences between a credit card and a debit card is a good place to start. This will help them learn about bad debt and good debt and how borrowing can work to your advantage or not.
5. Get them interested in investing: Like all learning, the particular is far more compelling than the general. Looking at listed companies that are involved in rockets, technology and sports will have a better chance of piquing their interest in shares and business generally.
6. Talk about long-term saving: Time is the most important factor when it comes to saving. This is because compounding is a powerful tool to have on your side. Therefore, the sooner you start saving the better off you will be.
7. Address the importance of setting goals: Goal setting helps with the discipline needed for saving, so a new netball or basketball kit for the season is a tangible and relevant goal.