Growing up in Gunnedah, NSW, Vanessa Stoykov was taught you had to work hard for your money.
“Now, it’s about working smart,” she said. “And that doesn’t mean you don’t have to work hard – it just means smart work is the work that you have to aspire to.”
The “smart work” is understanding wealth and how to make your money work for you through investments, to achieve your financial goals.
“No one person is going to teach you,” she said. “There are so many different finance experts out there, you have to find the person that suits your style of learning.”
And then pass that knowledge onto your kids.
Stoykov, a former finance journalist who is the founder and CEO of Evolution Media Group (a production company that aims to inspire wealth education through people’s stories), has commissioned research that revealed most Australians believe children should be taught about money matters at the same time they learn to read and write.
Research revealed most Australians believe children should be taught about money matters at the same time they learn to read and write.
But the research also found that parents felt ill-equipped to provide that crucial guidance, and that there is “little to no” financial strand in the Australian primary school curriculum.
“No one is born with sound money habits and it’s absolutely a skill that needs to be taught, and I want to help parents feel equipped to do this,” the mother of three said.
“By starting to teach them at a young age, and then continuing these lessons into their teen years, it can truly set them up for a better financial future.”
Explain the basics
Her first tip is to start with the simple stuff.
“Many children think that money comes out of a wall, so taking the time to explain that ATMs are connected to the bank, and that they only give you money that you have earned, helps them start to understand the basic principles of money.”
Further, Ms Stoykov said it is invaluable for parents to be open about what they can and can’t afford. This will help their children understand that they need to work for money, and save their earnings to be able buy the things they want.
Everyone has a “money personality”
Ms Stoykov, who wrote the 2018 financial guide book, The Breakfast Club for 40-Somethings, also suggests to get a grip on what a child’s “money personality” is.
“Every child is different, and they respond to learning styles differently, too, so understanding their ‘money personality’ will help you know how to best engage with them,” Ms Stoykov said.
The three personalities are:
- The hustler – someone who is always looking for ways to make money and improve their money situation.
- The saver – a person who enjoys being thrifty and saving their cash.
- The spender – someone who spends all the money they get.
If your child is a “spender”, it is important to teach them to still save money, as this is the personality that is “the hardest to shift once it becomes ingrained,” Ms Stoykov explained.
“You’ll get the child who wants a Louis Vuitton hat. So we need to teach them that before they spend all their money on such things, they should divert some of it into their savings.”
Get them a bank account
And one way for a child to save, is through a bank account. Ms Stoykov said all children should have their own account by Year 7.
“It’s giving them control and accountability and that’s really positive,” she says. “Giving them accountability is the best way to learn.”
For more information, visit Vanessa Stoykov’s website.
Article supplied with thanks to Hope Media.