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 kids 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
matters 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 money 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
Talk to your kids about money often to help them make this
invisible money real.
When should you talk to your kids
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
The ATM is a great place to start teaching kids about money. 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.
If 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 is
another way you can talk to your children about money. This 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
Take a look at our budget planner and help your kids put
together their own budget.
Giving pocket money
Pocket money can help children better understand the value of
money. See our giving kids pocket money
webpage for more details.
Money concepts at
Let your kids pay for small expenses with their pocket or
birthday money. This will help them work out how far their money
As your children grow up, they will have
different experiences and require a better understanding of money.
Here are some ideas about the sorts of things your children will
need to know at different ages.
Younger children (Preschool age)
- You need money to buy things
- Money includes notes and coins that have different
- You earn money by going to work
- There is a difference between things you need and things
School age children (Primary school)
- Comparing prices and shopping around before you buy
something is a good habit to get into
- Be careful when shopping online and never share your
personal information online
- You need to be patient when saving up and you can make
choices about how to spend your money
Practice the experience online
MoneySmart Teaching have a great range of digital activities
your kids can use to learn about money.
Teenagers (High School)
- It is better to use cash than credit
- Credit is money that you borrow and have to pay back with
- It is good to have savings in case of a money
- If you work a part-time job, you need to check your pay
slip to see that you are being paid the correct amount and if you
are paying tax
- Keep track of mobile phone data and expenses to make sure
you don't run out of credit or get stuck with a large
- Bank accounts can help you to track and keep your money. See
our under 25s
section for videos and tips about managing money for young
- Doing a budget helps you work out how you should spend
How to raise money smart
When children get to an age where they are earning pocket money
or working a part-time job, they will start to spend their own
Here are some things you may want to do with your children to
help develop their financial savvy and independence:
- 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.
- Set goals - Help your kids to set a goal
and track their savings through a chart (for example, they could
colour in coins on a chart to show their progress). For older
children and teenagers set up a bank account and help track saving
- Plan an event - Involve your children in
planning and budgeting for special occasions such as outings or
birthdays. If you are going on an outing work through all the costs
including transport and food as well as any admission
- Shop safe online - Make sure your kids
are safe when online shopping and know how to spot an online scam.
If it sounds too good to be true, it probably is.
- Needs vs wants - Help your kids avoid
spontaneous purchases and set goals to think about whether they
want an item before parting with their money. 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.
Shopping for a mobile phone
MoneySmart Teaching have digital activities to help your teens
learn more about how to approach
shopping for a mobile.
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
Last updated: 01 Dec 2016