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
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.
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.
When to talk to your kids about
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.
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
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
Help your kids put together their own budget.
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
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
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
- 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
- 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
- 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.
Our TrackMySPEND app can help your child
understand where their money is going and what they usually spend
Get your kids to work out how long it will take them to meet
their savings targets.
Savings goals calculator
MoneySmart Teaching in
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.
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.
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.
Last updated: 23 Jan 2019