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Parental Guidance: best rated money lessons parents give their kids

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Schooling kids about finances

Our family homes are often the first place we learn those important lessons that stick with us for the rest of our lives. Our attitude, perceptions and approach to life are often underpinned by our childhood experiences, much of which is influenced by our mums and dads.

This is especially true when it comes to money. Many of the financial habits we form as adults can often be attributed to parents’ guidance and words of wisdom; even if we didn’t appear to be listening, we were watching, which is why it’s so important to instil good financial habits in our kids from a young age.

With kids heading back to school this week, it’s the perfect time to reminisce about the valuable money advice our parents imparted to us. Here, some of our Gateway staff members share the best financial lessons they were taught by their parents or that they give their kids.

Paul Thomas

Paul Thomas, CEO
My parents did three things to make my siblings and me money-smart. Firstly, they encouraged habits of thrift by role modelling the need to save for a rainy day. Secondly, they enabled us to experience the relationship between work and money in order to appreciate the value of a dollar. Thirdly, they repeated the mantra “money does not grow on trees” to anchor us to the reality of living within our means and to underscore that money is not an unlimited resource.

My parents intuitively knew that good money habits start from an early age. On reflection, I believe that they imparted many financial lessons silently though their own behaviours – words were not always required. My father, in particular, drilled into us the importance of having a longer term focus and the dangers of overspending in the short term. Mum’s favourite money saying was that “money should not burn a hole in your pocket”.

It really does pay to teach kids about money. Showing them the ropes can insulate them from making major mistakes later in life. This, of course, will positively impact their quality of life as adults. So, set the right money examples for your children. The things you do now to shape their attitude towards money will help them become financially independent down the track.

Allyson Bailie

Allyson Bailie, Senior Manager, Sales and Customer Experience
When I started high school my mum told me she was going to start giving me weekly pocket money – I was thrilled, but my excitement was short lived. In her next breath she told me that to get this pocket money I would need to do a few jobs around the house each week, including cleaning the bathrooms and keeping the t-shirt ironing up-to-date. Really? Why did I need to do these terrible jobs to get money? I was so angry. All my friends’ parents just gave them pocket money – no jobs required. As a 13-year-old this was the last piece of evidence I needed to support my claim that I had the very worst mother in the world!

I took a while to mull over my mum’s offer of working for weekly pocket money. I knew this money would get me the books and music that she always refused to buy me. It would also allow me to occasionally buy lunch from the school canteen rather than bring my lunch from home. So I decided to do the weekly household jobs.

Many years on, I now see that my Mum was only trying to teach me that to get money you have to work for it and it isn’t something that just gets handed out. Now as a parent of three children, I try to encourage them to help with the household chores by paying them a few dollars for each job. But to my horror they always want to spend their money straight away on treats, takeaway food or toys. Now I find myself asking my Mum for advice on how to let my children make their own mistakes with money.....oh, the sweet irony!!

Peter Gilmore

Peter Gilmore, Chief Financial Officer
I recall how my parents and grandparents set examples of financial discipline.

My parents and grandparents lived through the Great Depression and the World Wars. For them there was very little luxury, but they got by with hard work and by being careful about what they spent. They also knew how to save for a rainy day, and to be modest about their circumstances in good times, whilst being mindful of those less fortunate.

For instance, my Irish grandmother always counselled me to never tell anyone what I earned – as half the people will laugh at you, and the other half will be torn with envy.

Meanwhile, for decades, my German grandmother would carry hot water from the tap near the water heater in her bathroom to the sink in her kitchen, to avoid wasting the hot water that would be lost in the pipe that ran between the two.

I grew up with the discipline to make my own lunch each day, to catch public transport rather than drive, to do my own odd jobs around the house, and to always work within a budget as part of a long-term plan.

The moral of the story, don’t equate financial discipline with being tight, equate it with being smart!

Zeb Drummond

Zeb Drummond, Sales Manager
My parents taught me the value of money through the transparency of their own financial situation. They told me how much money they made, what the bills were and why we couldn’t go overseas on holidays.

My mother explained that for every pay check she received, a small portion went into another account with another bank, to ensure there was enough money for the things that really mattered to her. Mothers being mothers, I later found out that 99% of this money was for health insurance for her family, not her own enjoyment.

Lesson: know what is important to you and save for it. Restrict your access to the savings and remove the temptation to spend it.

Both my parents taught me to value a dollar by encouraging me to learn about the things I was tempted to spend money on. If you understand how something was made then you can appreciate if it is good value or not. I began to appreciate quality craftsmanship over a more popular brand name option.

Lesson: appreciate what you are purchasing and why. Value for money comes often from quality not a brand name.

My parents also taught me to count the money you have and not the money you don’t. If you spend all of your time focussing on what you don’t have, or on what someone else has, you will never appreciate your own situation.

Lesson: be grateful for what you have.

Lexi Airey

Lexi Airey, Chief Customer Officer
My Mum moved my pocket money from weekly to monthly at a very early age. This taught me a swift lesson in budgeting, with the pocket money all gone on day three of the first month.

I also received fines during the month for being naughty and could earn bonuses, (or the money back because I had lost it), through extra chores: each chore being valued at a different amount. So some months I was battling with my sister over who could do the chores! I also remember extremely protracted negotiations for a pay rise each birthday.

Without the ability to impulse buy, it did teach me to question whether I really wanted something, and the value of money.

Jack Czechowski

Jack Czechowski, Senior Manager, Credit & Operational Risk
As a parent, I will teach my son about the benefit of compound interest. The trick is to reinvest the income received from an investment.

As ASIC states on its MoneySmart website, “compound interest is like double chocolate topping for your savings”. You earn interest on interest.

The idea that the compounding effect increases the rate of saving over a period of time is something that I hope will motivate him to save for the long-term.

If you have smart money advice you received from your parents or that you teach your kids, we’d love to hear from you! Leave your comments below.