Some of Australia’s youngest residents have drummed up some impressive savings habits, according to newly released findings from Roy Morgan Research.
Close to three in four (74 percent) of individuals aged six to 13 years old have personal savings, with a combined $653 million in savings among this age group across the nation. Of this, 10.2 percent of these young savers have $1,000 or more stowed away in savings accounts. But others may need a nudge — 26 percent of children between six and 13 years old have no savings or are unsure if they do.
“There is obviously a major role to be played by parents to encourage their children to save but banks also need to play a role by providing suitable products and incentives,” said Roy Morgan Research industry communications director Norman Morris.
So how can parents encourage their kids to save now — potentially building better savings habits in the future?
Open a savings account
According to research from the Commonwealth Bank Foundation, 49 percent of those aged 20 or younger have a personal budget. This jumps to 71 percent by Aussies’ mid-20s and 78 percent by their mid-50s to 60s.
Why not start encouraging positive financial habits earlier in order to give kids a head start for those all-important financial milestones later on in life?
Open a savings account in your child’s name to encourage them. You could even open a high-interest savings account that discourages frequent withdrawals, while rewarding steady savings with bonus interest.
Match their savings
It can be tough for kids to save — if they receive a spot of pocket money each week and money for birthdays, they might be tempted to splurge this entirely on the latest gadgets.
But if you offer to match their savings dollar for dollar, they’ve got an incentive to put money in the bank, rather than spend it.
Set up a star chart
Some kids will find it easier to save up for a coveted item if they can see their progress.
Rather than giving kids money for chores each week, you could add a gold star sticker to a chart they’ve decorated. Once they’ve collected a pre-determined number of stars, they get rewarded with the item.
This is a good way to impress upon kids the importance of not buying items impulsively.
Save as a family
Are your children keen to head to a theme park during the next school holidays, go on a beach trip or go mini-golfing on the weekend?
Talking about the cost of activities as a family and saving up together may encourage smart financial habits. It also encourages you to save up — you’re a role model for your kids, so take this in your stride and show them the importance of diligent saving!
Even if kids contribute a very small proportion of the overall cost, they can still be part of the saving experience.
Finally, explore some of the money-saving games online, not to mention apps you can download to your iPad or tablet.
There are plenty of kid-friendly games that teach kids how to save in a safe, fun environment.