Super can seem like a big complicated topic but it’s a part of financial planning in Australia and other countries. It’s never too early to introduce kids to the concept of super and teach them to take control of their financial future. Here are some fun ways to explain super to kids and make a complex topic an adventure!
Super Accounts!
Super is like planting a money tree that grows over time and gives you a big harvest when you retire. It’s a special savings plan where a part of your income is set aside during your working years so your wealth grows. Think of it as a long term investment strategy to secure your future.
In Australia, super is a part of retirement planning. Super funds like Hostplus and Australian Retirement Trust are the gardeners of your money tree. They manage and invest your contributions and offer different investment options to suit different financial goals and risk tolerance. Choosing the right super fund is important – it’s like choosing the right soil and sunlight for your tree. Consider fees, investment performance and services to make sure your money tree grows well.
Imagine a treasure chest where every coin you save grows and grows and one day, you have enough to stop working and live happily ever after! That’s the basic idea of superannuation – a special savings account for retirement.
What’s a Super Fund Account?
When you start working, a part of your pay goes into your super account. This is called the Superannuation Guarantee. These contributions are invested and grow over your working life, ready for you to use when you retire.
Learning Activity: Use a clear jar as a visual aid. Every time your child does a chore, add a small amount to the jar and explain that this is like how super grows with contributions from work.
The Hungry Hungry Hippos of Super Retirement:
Think of each super account as a Hungry Hungry Hippo. Each “hippo” (account) is hungry for your “marbles” (money). Just like in the game, the hippos “eat” some of your marbles (fees).
Consolidate Your Hippos:
What if you had one big, efficient Hippo instead of several smaller ones? That’s what consolidating your super accounts does! By combining your savings into one account, you reduce fees and keep more of your “marbles”.
Learning Activity: Introduce a Hungry Hungry Hippo toy and the jar from the previous activity. Each week, have your child “feed” the hippo a marble. Explain that multiple supercounts mean feeding multiple hippos and leaving fewer marbles for them.
Super Investment Options:
Imagine a treasure hunt with paths of different difficulty. Some paths have smaller, easier to find treasures (low risk, low return) and others have bigger treasures with greater challenges (high risk, high return).
- The Safe Shoreline (Low Risk, Low Return): Like finding treasure in shallow water – easy to get to but small rewards. This is like bonds or savings accounts.
- The Mysterious Jungle (Medium Risk, Medium Return): A bit harder to navigate but better rewards. This is like balanced funds.
- The Mountain of Legends (High Risk, High Return): The biggest treasures but with the toughest challenges. This is like high-risk investments like stocks.
Learning Activity: Use three cups to represent the paths. Cup 1 (shoreline): one marble close to the starting line. Cup 2 (jungle): two marbles, further away. Cup 3 (mountain): nine marbles, furthest away. Have your child toss marbles from their jar into the cups and discuss the risk and return.
Future Proof for Generations to Come:
Teaching kids about super early on helps them build financial literacy, and future-proof themselves. By making it fun and relatable we can give the next generation control of their finances.