I get asked questions by parents about saving for their children a lot. Questions like: Should I be saving money for my kids? What’s the best savings account to save money for my kids? Should I be investing for them? What's the best investment account for kids?

My response is always quite different to what people are expecting!

[Note that this article isn't talking about general saving you may do considering possible needs of your family/children in the future such as education].

My first question to ask is why? What is the purpose for doing this? Consider these questions:

1. Is it to teach them the value of money?
2. Is it to teach them how to save?
3. Is it to give them a windfall at a specified age in the future?

Once we have ascertained the purpose we can start to work out a strategy.

If it's about teaching them the value of money or how to save, we need to think about how old they are.

If your kids are not old enough to use a debit card, my view is that there is little point in anything other than a clear money box – this way you can give them money for chores or they can put money gifts in there and see it growing right in front of them.

And when they want to buy something with it – they can see it disappearing. It’s a powerful exercise that is much more difficult to achieve with a savings account.

Once they are old enough for a debit card, I highly recommend something like a Spriggy Card so they can start to learn about online banking and using money in today's world. And introducing them to the 50/30/20 rule at this point is recommended (50% - Needs, 30% Wants, 20% Saving).

Don't be fooled though, although these companies say they are teaching your kids about money - I recommend a true education program that isn't linked to a financial product like ours at Kids Get Money.

Now let’s come back to the 3rd question – ‘Is it to give them a windfall at a specified age in the future?’

If this is something you want to do, I get it - but before you start down this path, you should answer this next question VERY honestly.

“Are you on track to retire with an owned property and at least $250,000 (or pounds or USD) in cash (superannuation or retirement savings) OR if you don’t/won’t own a property at least $750,000?”. (These numbers are my opinion, there's a few factors here that you may need to consider with the help of a financial adviser.)

Here is my reason for asking. Quite frankly at this stage, your kids DON’T NEED YOUR MONEY. You need to put your own oxygen mask on and ensure that your own financial future is secure.

Just like you had, your children have their whole life in front of them with a world of opportunity awaiting them.

What they really need is this – and I promise you, these are worth more much more:

1. For you to set the example of looking after yourself as the first priority

2. To teach them how to make money, save money (minimum of 20% every single pay cheque) and grow money by investing – giving them a handout is not going to do that for them.

If your own financial future is secure, then this may be a good time to get started on that windfall – find the savings account with the highest interest rate (compare accounts on a comparison site like Canstar) or if you have a lump sum already then a term deposit or managed fund could be good options.

Here at Kids Get Money we provide money education - if you need financial advice, you can find registered financial advisers in Australia at Moneysmart.gov.au.

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Annette Rose, CEO/Founder