When it comes to teaching the basics of finance to your children I’m sure most parents would agree it’s never too early to start.  As a father of four, I’ve come to realize that more and more young people are managing financial matters, such as credit cards and mobile phone payments.

That’s why I reckon it’s best to get your kids started as early as possible, so they’re not only aware of the dangers and pitfalls they could run into, but so they can understand the value of money and how to best manage their finances later in life.

Believe it or not, 90 per cent of children learn their financial habits from their parents. So unless someone sits down with them and explains financial matters with them, and explains that there are a number of ways managing finances, they’re just learning by observing and may pick up bad habits.

So where do you start?

Kindergarten students

If you’ve got kids that are in kindergarten, you’ll know that they aren’t able to understand ‘size’ when it comes to money. They automatically think that if something is bigger, it costs more. A good way of teaching them is to play shops and exchange dolls and toys for money. Another option is to give them a little bit of pocket money, like 20 or 50 cents each week, and get them to put that into a clear piggy bank so they can gradually see the money rising. Once their funds reach a certain point, take them to the shops and get them to pay for some goodies.

Primary school students

It’s a good idea at this age to give your kids some pocket money that’s linked to chores. I’m not talking about chores around the house that they should be doing as being part of the family unit, but get them to do some extra chores like folding the washing or taking out the garbage, so they understand that they don’t get something for nothing. Secondly, start taking them shopping with you to supermarkets so they can appreciate how much things cost and where your money goes.

High school students

I reckon this is the most crucial age. My advice would be to encourage your kids to get a part time job. All my kids had part time jobs at 14 years and 9 months so they could understand the value of money and get a better idea of your rights as a consumer. Another thing to remember at this age is to compare the benefits of different spending patterns.  For instance, my kids pay for their mobile phones bills and they might spend $40 per month and I’ll point out that that money is equivalent to two movie tickets.