Practical advice to help children learn about money

10 September 2018

Natasha Johnson, Wealth Adviser |

Despite a large number of resources available, many parents find talking to their children about money a challenging task.  

Generation Alpha and Generation Z are the first generations to grow up in an invisible money world. Not seeing physical money exchanged for goods and services is making it harder for children to grasp its value; they may see this invisible money as an unlimited resource rather than real money that their parents have earned and are spending.  

Although teachers and peers have an influence, children first learn about money and how to manage it from watching and listening to adults at home. Children pick up basic financial concepts, such as value and exchange, as early as three years old. By age seven, many of their attitudes and habits are set.

So - how do you pass on good financial values to your children to empower them to become financially capable adults? The first steps toward helping your child understand and grasp the concept of money begins with talking and engaging them in practical money activities.

The following activities have been adapted from the eBook How to Talk Money with Children, published by the Financial Planning Association of Australia in 2018.

Activities for children (ages 4 to 8)

  1. Give your child a piggy bank that is separated into 3 sections – saving, spending, and sharing. The sharing section can be used for buying birthday presents for friends and family, donating to those less fortunate, etc.
  2. Each week give your child a small amount of pocket money for doing age-appropriate chores around the house. 
  3. Carry cash and use it to pay for things occasionally, as an exercise to help children grasp how money works.
  4. Have a money jar for family outings and encourage your children to make personal contributions. If your child has contributed financially, they are much more likely to have an appreciation for the things you do together as a family.

Activities for tweens (ages 9 to 12)

  1. Show how invisible money is real money by taking money from an ATM before making a big purchase.
  2. Include tweens in basic purchasing decisions at the supermarket or when buying clothes.
  3. When you’re ready, give your child a prepaid debit card designed for children under 18. Although you have ultimate control of the card, they will appreciate the responsibility and using something that is more reflective of how adults use money.
  4. Share your household expenses on a spreadsheet to help your child understand adult financial responsibility. If you feel comfortable, add your household income to the spreadsheet and show your children how much is left over each month. This is likely to be an eye opener for them and give them an appreciation for the work you do.

Activities for teens (ages 13 to 18)

  1. Involve your teens in planning for family holidays by having them research potential activities and encourage discussions about the sacrifices or trade-offs that have to be made to go on the holiday. 
  2. Have your teen track their expenditure via an app or spreadsheet. If your teen has proven they are making sensible financial decisions, you could consider increasing their pocket money as a reward.
  3. Gradually add financial responsibilities to help your teen develop their personal finance skills.
  4. Teach teens to save for the big things. Instead of buying them the expensive pair of shoes, come to an agreement and ask for them to save a certain amount to contribute towards the purchase. By not getting the shoes instantly, they are able to weigh up their options and consider the value of money.
  5. Stick to the principles of budgeting. If your teen spends all of their money don’t give them extra money. Sure, they may get upset in the short term but it is important to reward good habits, not bad.
  6. Teach the power of saving and living within your means early in life. One money habit to encourage could be saving one third of their income and only spending the remaining two thirds of their income.
  7. Help your children save with incentives such as contributing 30c for every dollar they save to help increase their savings and encourage positive financial habits.

Money doesn’t buy happiness, but - being in control of your financial future, where you have options and choices, particularly as you get older, does make you feel safe – and safety is a basic human need. Giving your children a good foundation and teaching them about financial matters is essential for their personal development. 

Children pick up habits and values from their parents. If you need assistance with managing your finances as the first step in your family’s education, then contact us.


The information in this document reflects our understanding of existing legislation, proposed legislation, rulings, etc., as at the date of issue. In some cases, the information has been provided to us by third parties. While it is believed the information is accurate and reliable, this is not guaranteed in any way. The information is not, nor is it intended to be, comprehensive or a substitute for professional advice on specific circumstances.

The financial product advice or information in this document is of general nature only and has not taken into account the investment objectives, financial situation or particular needs of any particular person. Before making an investment decision on the basis of the advice above, a prospective investor needs to consider, with or without the assistance of a professional adviser, whether the advice is appropriate in the light of their particular investment needs, objectives and financial circumstances.