How to build financially resilient kids

As a parent or guardian, helping your kids build financial resilience is a powerful way to support their financial futures. 

Resilience is the ability to thrive in the best of times and bounce back when those times get tough. When it comes to money, financial resilience is the ability to withstand life events that impact one’s income or assets.

Most people will experience a significant life event that will put a strain on their finances at some stage. However, with the right tools and behaviours, you can weather the storm. Help your kids learn financial resiliency at any age with our top tips below.

Ages 1-2: Set up a piggy bank 
This can be implemented from a young age and even turned into a fun game. Find a piggy bank or coin box and help them collect coins to insert themselves. It will help with their fine motor skills and teach them that the piggy bank is something special to be cared for.

Piggy bank

Ages 3-4: Take them shopping
Once their piggy bank is full, discuss how they want to use their savings. They may want to buy something for themselves or save a bit for later. Empower your child to make the decision and then support them to make it happen. This will help them learn about responsibility, delayed gratification and the beginnings of money management.

Ages 5-6: Give them an allowance
Give your child a chance to earn money, just like parents do, and discuss what this means for them. Are they ready for more responsibility and the rewards that come with it? They can start by completing chores around the house like making their bed, picking up laundry, feeding pets and helping to take the rubbish out. This is a great chance to discuss expectations and consequences.

Coins in a jar growing a plant

Ages 7-8: Start a savings account
Your child may start receiving birthday money at this age or even doing chores for trusted relatives to earn extra coin. Encourage them to continue saving for larger items they may want. This is the perfect time to graduate from their piggy bank to a real savings account. Make it an outing! Head to the bank together to open an account and make their first deposit.

Ages 9-10: Start a business
Some kids love the idea of working to make money, either by making things to sell or by providing a service in their community. Encourage this behaviour! You might even offer start-up capital to get their idea off the ground. Be sure to discuss what profit means - you don’t want your child’s new business to be making a loss!

Mother helping child on the computer

Ages 11-13: Assist with goals-based budgeting 
As kids mature, their appetite for expensive items increases. This is a great opportunity to focus them on working towards those wants. Help them write out a plan on what they want to buy and what they will need to save. It’s an ideal time to discuss the difference between needs and wants!

Ages 14-15: Begin a part-time job
At this age, they may be showing skills or interests they can use to earn a little extra. Perhaps they could do some work dog walking, gardening, or babysitting for trusted friends or family? Supporting any interest in part-time work will help keep them on track to their goals-based savings.

Ages 16-18: Prepare for adulthood
This is when all the good habits you’ve started building can be put into practice. At this age, you could give them more responsibility with an EFTPOS or debit card. Help your child set up an everyday account, in addition to their savings account. They may be interested in buying a car so discuss how they could save for this, versus what a loan would mean. This is also a great time to discuss different types of investments. You could even help your child open their first Kiwisaver or superannuation account.

There is no rule book for teaching your kids about finances, but if you can start small, encouraging good behaviours from a young age, then your children will be able to reap the rewards as they reach adulthood with financial confidence.

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