Kia Ora e te whānau,
Welcome back to Maori Millionaire. Today, we have an interesting topic which I'm sure many parents around the motu will resonate with... teaching our tamariki about finance.
I'm no mother and so I have no experience with parenting, however - I was once a little girl being raised and I can share what worked and didn't work for me.
But first, I wanted to share something which is an amazing way for Whanau to modernize money with their own kids. It's called 'SquareOne'.
If you’ve been wondering how to teach your tamariki about money, we’ve got the solution for you! With Aotearoa’s first youth account, SquareOne is an app that fosters great habits and learning about money, while giving kids the opportunity to set goals, earn money and gain some financial independence.
This FREE app, downloadable from Apple Store or Google Play, is super easy to set up and use, and the whole whānau can get involved too. You can set jobs for your kids to do, set up and automate pocket money, and have control over what your kids can do with their card. Each kid you set up on SquareOne gets their own Mastercard (just a payment card - not a credit card), which really helps when no one carries cash around anymore. We’re heading toward the digital age, with everything done online and the tap of a card, so what better way to teach them how to manage their money than their first youth account with SquareOne.
If you’ve got one device in the house, kids can access their SquareOne profile using our Family Mode. If they have their own, they can have SquareOne on their device - there they can set up savings ‘Pockets’ and track their savings, check their spending, see the jobs you’ve set them, and learn great money habits along the way.
They have had some great reviews from parents around the country who have been using SquareOne in a variety of ways. Also a couple of pretty thorough ones on Money Hub and Stuff.co.nz too. Gone are the days of jars of coins, or little plastic pigs from the local bank - our kids are growing up in a cashless world, and parents need the tools to keep up with the times.
Get your kids helping out around the community and earning some money along the way. Teach them the skills they’ll need to thrive in the future. Yes - money can be a taboo subject, but with SquareOne we can start to have those everyday conversations to make sure our kids are learning the right stuff at the right time, for their future.
Use the code: MONI5 when you sign up - you’ll get $5 to kickstart your kids’ savings once you’ve topped up!
So, if you've managed to digitalize your putea for your kids then implementing the other ideas I have will become easier.
My first suggestion is to normalize conversations around money. One reason Maori have some of the lowest rates of financial stability is because we were not taught about financial literacy. Financial literacy leads to financial independence, and so by talking to your kids about finance, you'll make the education side of it much more natural and easy.
Things to talk to your children about:
Interest rates - what this means for mum and dad.
Debt Cards, Eftpos cards, Credit cards and the difference between them
What are loans, how do they work, what is the cost of a loan and what does the lendor get out of this transaction
The role of marketing
These topics were discussed in my house which allowed me to have a basic understanding of financial concepts before I was able to learn the next level ones at a later point. It's much easier to learn about these things when you are young as opposed to learning them after you've moved out of home. The reason being is that the consequences of not knowing these things are much bigger when you're older.
Jobs or Chores for money:
Contrary to many parenting styles, I wasn't rewarded for work around the house with money. The reason for this is because if you grow up with the idea that doing your own dishes pays $5 then you will be greatly surprised when you move out and find that it doesn't. Also, a kid gets to live in your house rent free why should they get paid to wash the dishes that they ate off? Aroha mai if this is harsh, he whakaaro noa iho.
The other thing to consider is that if you need them to do a job you don't want the "how much will I get out of it?". This makes them believe that everything they do must come with a reward which can be problematic because it isn't the case.
Alternatively, you can teach your children that wherever you live, you must contribute. This allows them to learn that when you get something, you must give as well.
If you do want to give your children money, then you can do this as a 'privilege and not a right'. This means that you stop giving it for any reason: bad behavior, you have no money, timea timea...
Work Hard Play Hard:
My last tip is contrary to my mum's idea of parenting but it's to encourage your children to work. I had to beg to be allowed my first job at 14 because my mum believed that my only job was my education ( I acknowledge the privilege in this). But, once I had my first job there were rules which applied:
It was not to interfere with school.
No work on school nights.
It must not interfere with my usual house chores
10% of income had to be saved
The last one is the most important. If your child works from a young age then they will gain an understanding of how the real world works which is that money is a resource and your time will be rewarded with money. By gaining an income at a young age you have an opportunity to teach your children how to manage this income right from when their income is small. This will allow them to:
Start investing young which will allow for compound interest to take place.
Risks are less because they don't have expenses to pay so there will be no consequences if their portfolio drops.
Learn the value of putea.
Appreciate the concept of work.
Anyway's whanau that's my speel for today on how to teach children about money, straight from someone who's never had children or parented at all...
Remember to sign up for SquareOne and to use the code MONI5 . Check out their website to find out more. Please note that by you using this code, I will receive a commission. This commission allows me to continue blogging and sharing my finance tips and tricks for free to you at home.