Teaching kids about money

Piggy bank basics

In a rapidly changing world, teaching your children about managing money has never been more important. Here we explain how to raise money smart kids.

Why teaching financial skills is important

If kids develop good financial skills from an early age they'll be ready for the financial challenges of adulthood.

Giving your kids a good foundation and teaching them about money is critical for their personal development. Showing children the basics such as how to budget, spend and save will establish good money habits for life.

Invisible money

In a time of credit cards, internet banking and online shopping, children don't often see people buying products with physical money like notes and coins.

Not seeing notes and coins exchanged for purchases makes it harder for kids to get their heads around what things cost. They might see this invisible money as an abstract and unlimited resource rather than real money coming in and out of their family's bank accounts.

Talk to your kids about money often to help them make this invisible money real.

Video: Money Makes the World Go Around

Video about helping kids understand invisible money

This video uses social trends and statistics to show the demands of our modern world on young people, where money has become invisible.

When to talk to your kids about money

Teaching younger kids the value of money through real life situations and examples will help them understand where money comes from and how it is earned. Here are a few examples of how you could approach this with your kids.

At the ATM

You could explain to your child that the ATM holds the money you have made by working hard and saving. It is not just a hole in the wall where money comes out.

When you take money out of the ATM it is taken from your bank account and you'll have less in your account to spend later.

At the supermarket

When buying items at the supermarket, you can explain to your kids how items are priced and that you can get cheaper or more expensive versions of the same product. This is also an opportunity to discuss how you can shop around for the best price.

You could get them to compare prices for you and pick the cheapest one. If they want a particular brand then explain the price difference to them.

Paying bills

When you receive bills in the mail or online, this can be an opportunity to explain that electricity or your internet connection costs money. You could explain that to pay a $150 power bill it took you so many days at work to earn the money. This will help create a connection between time spent at work and money, as well as the fact that electricity and the internet cost your family money. It might also make them think twice about leaving lights and appliances on.

Doing a budget

Involving your kids in discussions about your family budget helps give them the big picture about costs and spending.

By explaining how much money your family has to spend every week and how this money is spent, your kids will better understand the costs of family life and how much can be saved for other things.

Help your kids put together their own budget.

Budget planner

Giving pocket money

Pocket money can help children better understand the value of money from a young age. The types of jobs that earn pocket money and how much you pay will depend on what suits your family's situation.

Paid jobs versus family jobs

You could decide that different jobs help earn pocket money while others don't. Family jobs that you might not pay your children for could be things like setting the table for dinner, making their bed, washing up and tidying their room. Paid jobs could be tasks that a parent would otherwise have to do, like sorting washing, mowing the lawn or vacuuming the floors.

You don't get something for nothing

Pocket money could be paid to encourage a good work ethic. If you set certain chores for your kids and the chores are not completed, you could choose to not pay pocket money for those jobs or pay them less. This will reinforce the idea that you only get paid in full when you complete the job properly.

Piggy banks versus bank accounts

Piggy banks are a fun way for children to start learning about money and to encourage saving. They are a good option for younger children as a savings starting point and are a more tactile experience than putting money into a bank account. A bank account for your child can give them a starting point for the ideas of saving and interest from a young age.

Talk to other parents

Talking to other parents can help you get ideas on pocket money to suit your family. You can find out what jobs they pay their kids for, how much they are paying and how often they pay their kids.

Practical ways to raise money smart kids

Here are some things you may want to do with your children to help develop their financial independence before they start work:

  • Shopping lists - Ask your kids to help you compile a shopping list of needed items for home.
  • Research purchases - Work with your children to research online or shop around to find the best price for an item they want.
  • Plan an event - Involve your children in planning and budgeting for an outing or birthday. Work through all the costs, including transport, food or admission prices.
  • Needs versus wants - Help your kids avoid spontaneous purchases by setting goals and prioritising what they spend their money on. Discuss the difference between needs and wants and encourage your children to think about this before spending.
  • Check mobile use - When your child receives their first mobile phone, show them how to check and minimise data usage, set boundaries on use and involve them in selecting pre-paid or a plan.
  • Criticise ads - Get your children to review advertising on TV and in catalogues with you. Ask them what the ads are trying to sell, how they try to sell it to you and if they need the product they are advertising.
  • Set goals - Help your kids to set a goal and track their savings and their spending.

Get your kids to work out how long it will take them to meet their savings targets.

Savings goals calculator


MoneySmart Teaching in schools

Kids are learning about money in school. This can be happening in a lot of ways, whether through school fundraising activities, as part of a kitchen garden project or using the school canteen.

Schools and teachers are ideally placed to help young Australians develop the knowledge, skills, attitudes and behaviours needed to meet the challenges of the twenty-first century.

ASIC's MoneySmart Teaching program builds the consumer and financial literacy capabilities of young Australians and helps educators, families and the community teach young people about money. Take a look at some schools who have successfully integrated consumer and financial literacy programs in their school curriculum.

Practice the experience online

MoneySmart Teaching have a great range of digital activities your kids can use to learn about money.


Needs and wants 

(Year 2)


Party time 

(Year 3-4)


Helping out 

(Year 3-4)


Pay the price 

(Year 2)

Teaching kids about money is an important skill. Money skills should be developed from an early age and fostered into young adulthood. The more financially savvy your children are the better spending decisions they will make throughout their lives.

Related links

Last updated: 02 Aug 2019