Tag: Children & Money

How to Talk Money With Children – Part 1

Written by on 14 May 2026. Posted in Financial Education. No Comments on How to Talk Money With Children – Part 1

Part 1: Children (4-8)

Digital money is making it harder for children to grasp the value of real money, according to two thirds (66%) of Australian parents.
FPA Share the Dream Report 2018

The first five money lessons to teach kids

Teaching children about money can be a challenge, especially if you are pressed for time. So how do you pass on good financial values early on, no matter what? Clinical child psychologist Emma Spencer shares her advice.

1

Talk about where money comes from and how you earn it. At age three to five, children are mentally developed enough to start learning what money is for, where it comes from and why we need it. Explain the relationship between adults going to work and being able to buy things for the family.

2

Explain the difference between needs and wants. We live in a society where every new product is heavily marketed, creating temptation. It’s up to you to teach your children what is a necessity and what is a luxury—and to explain that even basic necessities need to be paid for.

3

Don’t mollycoddle your kids. You can’t shield them from reality and then expect them to go out and become resilient humans. If they run out of pocket money before the end of school holidays, don’t give them more.

Children need to be taught how to become independent. That won’t happen unless they learn to take responsibility for themselves.

4

Show good financial practices. When I go to the supermarket, I put my youngest in the shopping trolley and ask him to hold the money I will pay with.

Include your kids in tangible money activities because children learn by observing and imitating adults.

5

As early as four or five, explain financial concepts to help kids learn basic life skills. For example, let them sit down with you and watch you pay bills — in paper or online — and show them the family budget.

If you’re out shopping and you need to make a choice between two items, talk to your child about which one you are choosing and why.

Money talk is easier when it’s about everyday things!

How to introduce basic money concepts early

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.

Here are some practical exercises from the team at Banqer, to help your child grasp the value of money.

1

Give your child a piggy bank with sections for saving, spending, and sharing. Now set rules for each section. For instance, the sharing section could be where they draw funds to buy friends’ birthday presents. This will give kids the chance to experience and understand the different value that each option offers.

2

Now give your child a small amount of money to manage each week. Use a combination of notes and coins so they can learn about physical currency.

3

Carry cash and use it to pay for things occasionally. As an exercise to help children grasp how money works even when they can’t see it, show them an item and then show them the exact value of that item in cash.

You can say, “Today I am going to pay with this card, and it is exactly the same as if I were paying for it with this money”.

4

Talk about choices. Explain the reasons behind your financial choices so they develop an understanding of concepts like budgeting and saving, and can engage with the choices you’re making.

5

Have a family money jar and encourage your kids to make personal contributions. Explain that the money will pay for family outings like picnics, movies or holiday activities. This is a great exercise for learning the value of money. Also, your child will have much more appreciation for the things you do together as a family, if they feel they have contributed financially.

Next month we will be covering the next age group Tweens ages 9-12.

Download the eBook – How to Talk Money with Children PDF

Download the full report on research into raising the Invisible Money Generation – FPA Share the Dream PDF

Need some help on how to guide your kids be money wise?

Why not give us a call and arrange to speak with one of our advisors, contact us on 02 9328 0876.

Article by – FPA and Money & Life | www.moneyandlife.com.au

General Disclaimer: This article contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information. Please seek personal financial advice prior to acting on this information.

Top 5 tips for teaching your children about money

Written by on 14 May 2026. Posted in Financial Coaching. No Comments on Top 5 tips for teaching your children about money

1. Start in preschool

They say old habits die hard, so the sooner you start talking to your children about money the sooner they can appreciate its value. From my experience the general thinking is, once a child becomes a teenager they are ready to start having money discussions. I believe this is too late.

I’m not saying you should sit your 2 year old down and start talking about the “rule of 72” or “pay yourself first”; rather introduce your child to the concept that money is valuable at the same time you do so with other concepts, such as right and wrong and cleaning up after themselves. It pays to appreciate the value of money early.

2. Work for pocket money

Once your child understands the value of money we encourage our clients to introduce the concept of work for reward. Note that this is different to bribing your child by offering money to get them to do something. I’m talking about good old fashioned hard work in addition to those things we all have to do like tidy up after ourselves and keep our room clean. We encourage our clients to draw up a job chart of age appropriate “big ticket” chores such as washing the car, cleaning the bathroom, vacuuming, doing the dishes and mowing the lawn. We tick jobs off when they’re done and money then exchanges hands. Trading sweat for money reinforces the principle that money is earned and you need to work hard if you want more of it. Money doesn’t grow on trees.

3. Only empty half the bank

We have a rule at home that you can take up to half of the money out of your account to buy something you want – you have to leave the other half in there. This teaches kids that we don’t need to spend all the money we have saved on a single item. If we want to buy a new match box car for $5 we have to wait until we have saved $10 in our bank before we can take the money out. Rainy days happen for kids too!

4. Budget on holidays

Having a set amount of money to last over the holidays is a good way to show your kids how to spend money each day and make sure your money doesn’t run out. Helping your kids “average out” their pocket money introduces them to the concept of budgeting which will hold them in good stead for their adult lives.A budget each day keeps the holiday fun, yay!

5. Help teenagers get a job

Helping your teenager apply for and find a casual or part time job whilst they’re still at school introduces them to valuable responsibilities and skills around employment that will benefit them later in life. This also provides kids with some independence and builds self-confidence and time management skills.We ask our clients to work with their child to draw up a spending budget for their pay. Setting goals for big ticket purchases reinforces the rules we have introduced earlier in life, like budgeting and only emptying half the savings account. Independent teenagers – not as dangerous as it sounds!

The Key to Success…

The above are just a few ways to successfully introduce good money habits to your children. Our clients have told us the key to their success is to be consistent and just do it! We concur: action and execution is what most often separates success from failure.

Don’t know where to start?

For more help and to take a fresh look at the way you’re managing your own money, speak to your financial adviser at SFP. Or if you don’t have an adviser yet, contact us on 02 9328 0876.

Pocket money for kids?

Written by on 23 July 2019. Posted in Money Management. No Comments on Pocket money for kids?

Instead, try this.

Split the money for them into three pockets:

Spend pocket (40%)

Spend as usual now (lollies, toys etc.), pay for anything immediate. The key here is to allow them to buy whatever they want with this money. They are in charge of it. If they spend it all at once, they will have none left. Slowly introduce the basic save-spend conversation. Kids will learn the spending fundamentals fast.

TIP: Point out to them that once the money is spent, it’s gone forever.

Save pocket (30%)

Save for something big in the shorter timeframe, spend later.
Teaches them the concept of saving and having more to spend in near future. A more advanced version of this allows them to spend only half of what they saved, always keeping some money in the account.

TIP: Good old piggy works a treat here. Can be placed in their room. Point out to them that if they resist the temptation of spending all now, they will benefit from having visibly more later.

Invest pocket (30%)

Put away and invest to benefit from in 10 + years’ time (ideally buy and hold and never sell). This account should only allow only type of one transaction – buy. It can form an education plan, a property deposit plan or anything long term.

TIP: Must be set up as Automatic Direct Debit. Point out to them that every dollar saved and invested will produce income for as long as we keep it.

This approach teaches kids to split their income purposely for different reasons, just like the grown-ups do when they get paid. Don’t get lost in options, the key is to pick one you can stick with or seek our professional advice

Maybe your re-evaluating your own saving habits?

Speaking with a financial planner and reviewing your own financial behaviour to better guide your kids may help. Make a booking or call us on 02 9328 0876 to arrange a meeting.

Article by Michal Bodi | Senior Financial Planner