For all those parents of millennials out there, can you even begin to imagine what your progeny are going to be saying to their kids about money? Most likely they may not even have wallets with 'dollars and cents' in them anymore - GONE will be the piggy bank, GONE will be 'pocket money', and NO MORE will little fingers excitedly 'find' that random two dollar coin that fell into the cracks of the lounge.
A bit sad really! But what this means is, that as money loses its sensory value (every kid used to dream about finding 'lost treasure' or a 'suitcase of money'), so too does our ability to really control it diminish too. How easy is it to just 'walk and swipe' without a thought?
So what can we do to teach our kids about 'looking after' their money, when they might not even have seen it? The same way that we teach them about everything - by example.
Including even very young ones in conversations about money is not so hard - you can discuss with them how much everything costs, how much your house is worth, and how much the bank owns of it. It's not so much about understanding the exact amounts for really young children, but the concepts. Even young minds can begin to understand that you owe someone money for buying your house, and that money is a thing that helps you to be able to ask someone for something.
Especially though, you can talk to them about how choices you and they make as a family now could affect their future - how not buying them that soft drink or take away meal every Thursday would save in the long run off the home loan and that you could give them those savings when they're 18 and they will really need it.
For example, $5 a week over 15 years on a $300,000 loan will be over $10,000 saved on average! - $3,900 in actual 'savings' and $7,000 in saved interest! - Money out of thin air! Magic!
Although they won't exactly understand the amounts, they will be able to begin to grasp the idea that not doing something now can help them in the future. And even if that is hard to convey if they are too young to understand, their feeling of how you are discussing your care of them for the long term will give them a sense of security. It raises both you and them out of the moment and into a shared future together.
This empowers a young person, and shows them that you have their future interests at heart (be sure though to track these savings and keep good on your promise to them at 18 years old if you do this, otherwise this could seriously backfire by destroying their trust in you).
To bring the lesson 'home' to them, occasionally you might want to let them have access to these saved funds (which should be building up in your home loan redraw) for expensive purchases of value that they really really want and just have to have. Lessons of money empowerment like these are priceless. Instead of conversations like 'we can't afford it!', you can say, "Well, we have that money saved in our home loan from not having had takeaway on Thursdays for the last two years, maybe we can access those funds. But keep in mind you'll be missing out on the interest!"
Imagine the same scenario on just $10 per week - over $20,000 saved! ($7,800 savings and $13,300 interest) Your child now has the beginnings of a home deposit of their own at 18!
In an age where junk food is absolutely everywhere and childhood obesity is rife, I am sure that most families with a home loan can admit to $10 of overspending on each child's food budget per week. Creating this sort of relationship with your child is an absolutely priceless opportunity. And in an era where the age pension might just not be there to support you in the future, maybe all this money wisdom you have passed on to your children will help them look after you in the future.