Four money traps to warn your kids about
It takes willpower and experience to manage your finances and resist the constant barrage of money traps, like high-interest-rate credit card offers.
Mistakes are even harder to avoid when you don't realise they're mistakes.
So here are four money traps you can warn your kids about, so they don’t get caught.
1. Never having enough
Never having enough can be positive, because it gives people the drive to work hard and aim high.
But it can also be a trap. Because if you’re never happy with what you have then you’re always striving to buy something better or newer – like the latest smartphone when the one you have is perfectly fine.
This feeling of never having enough can be a problem for kids, especially if their friends have the latest gadgets.
Help your kids avoid this trap by teaching them to focus on what they have and how to make it last, instead of focusing on what they don’t have.
With FLX, you can instantly transfer pocket money from your Flexischools wallet to your child’s FLX account. Then you and your kids can monitor their spending and help them make their pocket money last.
2. Running up debt
Credit cards are an expensive trap that many people fall into because they’re easy to get. The same applies to buy-now-pay-later services. They’re traps because you must use future earnings to pay for your current consumption.
Help your kids learn to avoid this trap by giving them prepaid cards to manage. A prepaid card gives them the convenience of a credit card, but not the debt.
FLX includes a prepaid Mastercard® that your child can use to learn to pay with a card instead of cash. Safety precautions, such as age-inappropriate merchant blocks and no cash-out, give you peace of mind.
3. Not prioritising saving or investing
Failing to save or invest is a money trap, as is not prioritising it.
You may intend to save one day but keep putting it off. Or you may plan to save what’s left of your money at the end of the month but keep finding there’s nothing left. This can trap you because you may never save enough to buy a home or retire comfortably.
Help your kids avoid this trap by teaching them to save part of their pocket money. And teach them to prioritise it by first allocating a percentage of their pocket money to savings before they’re allowed to spend the rest.
With FLX, your kids can set savings goals and regularly transfer the money to those goals. The FLX app helps them keep track of how much they’ve saved.
4. Not learning about finance
Not learning how to manage money is a trap because, like most things in life, this is not a talent you’re born with but a skill you acquire.
It also increases the chances of falling for a scam, because you might not know if an offer is too good to be true.
You can help your kids avoid this trap by teaching them:
● To budget and manage their money
● Financial concepts, such as interest rates and inflation
● The true cost of debt, because it must be repaid with interest
You could also encourage them to learn about the property and stock markets, to broaden their knowledge.
This will help your kids build up a good general knowledge of money matters, which can help them avoid these and other money traps.
Teach your kids to manage their money with our FLX prepaid card and savings app. Learn more about FLX here.
This is general advice. Read the PDSs & TMDs at www.flexischools.com.au/legal before deciding if FLX is right for you. The FLX Services & Flexischools are provided by InLoop Pty Ltd ABN 27 114 508 771 AFSL 471558 (trading as Flexischools). The FLX Prepaid Mastercard is issued by EML Payment Solutions Limited ABN 30 131 436 532 AFSL 404131 pursuant to license by Mastercard Asia/Pacific Pte. Ltd.