The average cost of raising two children in Australia from birth to adulthood is roughly $812,000. So even if you’ve never been restricted by a budget in the past, parenthood certainly changes that for most people.
As your kids grow up, it’s important to explain the concept of money and ensure they know it doesn’t come from an endless well. The last thing you want is for your child to move out of home straight after high school and be unprepared for a world of expenses including rent, utility bills, groceries and transport.
There’s no perfect formula to readying a young person for the fiscal challenges of the world but with our list of tips, you can make some inroads while they’re still living under your roof.
First and foremost, get across the message that money is a limited resource, one earned by working. Give reasons for why purchases your child suggest are unnecessary or not feasible, rather than just telling them no.
Kids will inevitably emulate their parent’s behaviour from a young age, so set a good precedent when it comes to finances. Shop for bargains at the supermarket, wait until clothes are on sale and set aside money to save for particular items.
Not everything has a used-by date. Little tricks can help you save a few dollars at a time, such as keeping takeaway food containers rather than purchasing Tupperware, or using old t-shirts for exercising instead of buying a new Nike top.
It might be hard not to intervene but allowing your child to make their own financial decision and deal with the consequences can be a good lesson. Splurging on the latest iPhone might seem like a great idea at the time but when funds are running low down the track, it could serve as a reminder to be more frugal in the future.