Teach your Under-18 to Fish: Why Financial Literacy Beats an Allowance Alone

‍Two Different Paths:

Imagine these scenarios:

• Scenario 1 - The Consistent Spender: Your child gets their allowance and usually spends most of it on the latest trends. Sure, they're happy momentarily, but what are they left with as they grow older? They're back to square one, with no complete understanding of how to manage their money or make it start working for them.
• Scenario 2 - The Consistent Investor: Your child is empowered to learn the skills required to build a financial foundation. So when they receive their allowance, instead of spending it all, they could use their budgeting skills to set aside a portion to invest. With your guidance and the help of an app like Drip, they could learn with real investments, track their progress, and watch their money grow over time.

Which scenario sets your teen up for a brighter financial future?

Financial Literacy: The Gift That Keeps on Giving

While pocket money is a great way to teach kids about budgeting and responsible spending, it's only one piece of the puzzle. True financial empowerment can come from understanding how money works – how to earn it, save it, and make it grow.

In our opinion, this is why financial literacy is the ultimate investment in your teen's future:

• Confident Decision-Makers: Financially literate kids are better equipped for the future. All investments carry risk, so they need to understand the consequences of their decisions and learn ways to avoid common financial pitfalls when it comes to saving and investing.
• Goal-Oriented Savers: Knowing how to set and achieve financial goals is a crucial life skill. Whether it's saving for a car, a holiday, or college, financial literacy empowers teens to take control of their future.
• Future-Ready Investors: By starting early, young people can harness the power of compound interest and build a solid financial foundation for their future.

Drip: Your Child’s Financial Coach

Drip is more than just an investing app – it's a financial education platform designed for under 18s. With Drip, your children can:

• Learn by Doing: Explore investment options and track their portfolio, learning from the ups and downs.
• Get Guidance: Access educational resources, weekly check-ins with questions and videos. Then take the opportunity to talk about it at home.
• Build Healthy Habits: Develop a healthy and sustainable approach to saving and investing that will benefit them for a lifetime.

The Bottom Line

Pocket money is a great starting point, but it might not be enough. By combining regular allowances with financial education and tools like Drip, you can empower your child to become confident, responsible, and savvy with their finances.

Remember, it's not just about giving your kids fish (or pocket money); it's about teaching them to fish (for financial freedom!)

This information was prepared by Drip Invest as part of BetterLabs Pty Ltd (ABN 26620 505 615, who is an authorised representative of Cache Investment ManagementLtd (ACN 624 306 430 AFSL 514 360) (Cache). Cache Multi-Class Investment Fund is issued by K2 Asset Management Ltd, as disclosed in the Product DisclosureStatement (PDS). All information is general information only and does not take into account your personal circumstances, financial situation or needs. Before making a financial decision, you should read the relevant PDS and Target Market Determination (TMD) to consider whether the product is right for you and whether you should obtain advice from a professional financial adviser. All investments carry risk.

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