Teaching Kids About Money

Teaching kids about money is more important than ever. In a world of credit cards and cashless payments, many children rarely see notes and coins and can find it hard to grasp what things really cost.

Some may start to think that money is an unlimited resource and that we can simply swipe a card to pay for the things we want, when we want. And with an enticing range of toys, games and movies carefully placed to attract their gaze, it is no wonder many parents struggle to guide their kids into healthy saving and spending habits.

Be a Positive Role Model

Talking to kids about money in an age-appropriate way and taking stock of our own money habits are the keys to raising kids who are responsible money managers themselves. After all, when we teach kids how to budget, save, spend and act as positive role models we help them to establish good habits for life.

Start Early

There are some basic concepts parents can explore with children from 3-5 years of age that will help form the foundations for good money management. At this tender age, they are like little sponges and can quickly learn the basics.

Some Basic Concepts:


  • How we all need money

  • We earn money by working

  • You may need to wait to save enough money before you buy something you want

  • Importantly, that there is a difference between things you want and things you need.

Every Kid Wants a Piggy Bank

A cute piggy bank or a money box based on a favourite character is a great tool to encourage your little one to save. We love the Money Savvy Pig. The Moneybox Tin and Fat Pig Money Box are also cute options.

Try This Money Sorting Game

Coin sorting is also a fun game for this age group and is something you can enjoy together. Place three containers on a table and sticky tape a coin to the side of each. Then work with your child to sort a collection of coins into the right containers.

More Complex Money Ideas for Older Kids

By the time your child is 6-10 years old you can start to introduce more complex ideas like:


  • Making choices about how to spend money

  • Shopping around before you buy

  • Putting your money into a savings account, it will be protected and will earn interest.

Cupcake Wrapper Game

The cupcake wrapper counting game is a fun activity for this age group. Write the value in the base of the cupcake wrappers (45c, 60c, $1.50 etc.) and place them on a table. The aim is to draw the right value from a coin container and place it in the wrapper.

Into the Teenage Years

As kids get older, they can be encouraged to take responsibility for their own money and can be introduced to more advanced concepts like:


  • Compound interest

  • Responsible credit card use

  • Health and other types of personal insurance

  • Why it is a good idea to set money aside in case of an emergency

  • They can also start to learn about investment and taxes

A trip to the bank to deposit savings, or an outing to the shops with a budgeted amount to spend are good activities to engage teens. They will get a great sense of satisfaction from knowing that they are gaining skills for independent adult life.

Children and Chores

Financially responsible parents use chores as a way to teach kids about the value of a job well done. From this, kids learn that completing a task well is a reward in itself and that compliments and other rewards are secondary benefits. These kids develop inner drive rather than relying on external motivation and are likely to excel later in life. Remember to be positive about your own chores too. Kids pick up on negative attitudes and are likely to become negative themselves if this is the type of attitude they are exposed to.

Savings Rewards

When it comes to being money smart, saving is the first thing that comes to mind. It’s also one of the hardest lessons to learn. Pocket money can be a great tool for teaching kids how to save and make good choices.

It’s simple – buy one thing now or save and buy something more desirable later.

Letting children work this out for themselves and learn from their experience is most effective, but some guidance helps. You can encourage your child to save for longer by offering interest or by matching the amount they save. This allows them to see the benefits of not spending straight away. This simple activity will give your child a core money management skill to last them a lifetime.

Sensible Spending

When it comes to spending, it really is a case of ‘monkey see, monkey do’. If there is one lead children are likely to follow, it is their parents’ spending habits. But if you act as a good role model and make sensible choices, they will follow in your footsteps.


  • Make a list when you go grocery shopping,

  • Show your kids how to stick to it and

  • Talk to them about resisting impulse spending.

The Importance of Sharing

When children learn about the benefits of giving and putting the needs of others before their own, they become socially responsible.


  • Talk to your kids about their concerns in the world

  • Try to align their giving with connected charities

  • Keep the gift money separate from their regular savings

  • Once they have reached their gift goal or time frame, include your child in the process of delivering the donation

  • Remember to make your own donation too or match your child’s donation amount.

Be a Good Role Model

More often than not parents are so busy tending to the day-to-day needs of the family that their own habits go unchecked. But the best way to teach kids to take a balanced approach to saving, sharing and spending is to do it ourselves.


  • Keep your accounts in order

  • Budget for future expenses and talk to your children about regular household costs such as electricity, gas and internet.

  • Take the challenge to stay on top of your own money matters too, such as ensuring your wills, Health, life insurance and income protection insurance policies are up to date and provide the correct level of cover.

  • Talk with your kids about these necessary expenses so that they better understand the real costs of family life.

Remember, start early, include children in discussions about family finances without burdening them, and set a good example with your own money management. That way you will teach your kids to be money smart and will pass on important skills for life.
 

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