by Anita Moran anita.moran@dailypost.co.nz
Children need to earn their pocket money, says a Rotorua financial adviser.
They need to learn the importance of money from an early age and it shouldn't just be handed to them, says the manager of Rotorua ABN Amro Craigs, Tom Davies.
"It
is important for them to learn to spend their money on what they need rather than what they want."
He said children also needed to learn about earning money.
"It is vital for them to know that money is something people earn, not something that just comes out of an ATM. They need to be able to take responsibility for their money and understand what to do with it, especially if it is scarce."
Mr Davies said learning about money was a basic skill everyone should know.
"The earlier children learn the better."
A survey by AMP Financial Services (NZ) has found 90 per cent of New Zealand parents give their children money, and 56 per cent give their children regular pocket money.
Retirement commissioner Diana Crossan said parents who were giving their children pocket money were on the right track.
"One of the best ways to teach kids valuable lessons about money is to give them hands-on experience of managing real money of their own. And the best way to do this is by teaching them to manage their pocket money."
There were many ways of making saving fun for all children, such as encouraging them to save for things they want, she said.
Pocket money was a great way to educate children to become "financially literate". TIPS FOR KIDS:
*Have a goal - get your kids to know what they want to achieve
*Make it fun - consider incentives and rewards
*Keep records - encourage your kids to keep written records of income and expenditure to get into the habit of account-keeping
*Use everyday encounters - it helps kids learn about money in real life
*Explain interest - kids need to know about earning interest by saving and that you pay interest when you borrow.
