Financial Wellness for Families: Teaching Kids About Money

Financial literacy is one of the most valuable life skills a child can learn, yet many Australian families overlook its importance. Teaching kids about money from a young age helps them develop healthy financial habits, setting them up for a secure and successful future. The good news? You don’t need to be a finance expert to teach your children about money. You just need a few simple strategies to make learning fun and practical.

Why Teach Kids About Money?

In Australia, financial literacy isn’t a core part of the school curriculum, meaning most kids rely on their parents to learn good money habits. Without financial education, children can grow up struggling with budgeting, saving, and understanding debt. Teaching financial wellness early can:

• Instill responsible spending habits

• Encourage smart saving and investing

• Prevent reliance on credit card debt and Buy Now, Pay Later schemes

• Build financial confidence for adulthood

Strategies to Teach Kids About Money

1. Start with the Basics: Earning, Saving, and Spending

Even young children can grasp basic money concepts. Use real-life examples to teach them the difference between earning, saving, and spending. For instance:

• Give them small amounts of money for chores (earning).

• Encourage them to save for something they want (saving).

• Let them buy a small toy or treat with their own money (spending).

This hands-on experience builds a strong financial foundation.

2. Use a Pocket Money System

A structured pocket money system helps kids learn money management. Consider the “Save, Spend, Give” approach:

• Save: Encourage kids to put aside a portion of their money for future goals.

• Spend: Allow them to enjoy their money wisely on things they love.

• Give: Teach generosity by encouraging small donations to charity or helping others.

Apps like Spriggy, a popular Australian pocket money app, can also help kids track their money digitally.

3. Teach Delayed Gratification

One of the biggest financial lessons is understanding that you can’t have everything instantly. Instead of buying toys immediately, encourage children to save up for them. You can use a visual savings tracker (such as a jar or chart) to help them see their progress.

4. Set a Good Example

Children learn by watching their parents. Demonstrate healthy financial habits by:

• Sticking to a budget

• Avoiding impulse purchases

• Comparing prices before buying

• Saving for big purchases instead of relying on credit

Talking openly about money and decision-making will help kids develop a realistic understanding of finances.

5. Introduce Budgeting with Fun Activities

Turn budgeting into a game! Give children a small budget for a trip to the supermarket and let them plan what to buy within that amount. This teaches:

• Prioritising needs vs. wants

• Comparing prices

• Making trade-offs within a budget

6. Teach the Concept of Investing

As kids grow older, introduce the basics of investing. Explain how money can grow over time through compound interest and investments. Consider:

• Showing them how a savings account accrues interest.

• Playing investment simulation games.

• Using simple examples like “If you buy one apple tree today, in a few years, you’ll have more apples to sell.”

7. Explain Digital Money and Online Spending

With tap-and-go payments and online shopping, children may not see the connection between money and purchases. Teach them that digital transactions still involve real money. Explain:

• The importance of tracking spending

• How to use debit cards responsibly

• The dangers of Buy Now, Pay Later services

8. Encourage Entrepreneurial Thinking

Encouraging kids to think creatively about earning money builds financial independence. Support small business ideas like:

• Selling homemade crafts or baked goods

• Running a lemonade stand

• Walking dogs or doing small chores for neighbours

This not only teaches them about earning but also builds work ethic and confidence.

9. Help Teens Learn About Real-World Costs

As kids become teenagers, involve them in real-life financial decisions. Show them:

• How household expenses work (electricity, rent, groceries)

• How to create a budget for personal expenses

• The importance of saving for big goals (first car, travel, university)

Letting them manage part of their own expenses, such as phone bills or public transport, teaches responsibility before they enter adulthood.

Final Thoughts

Financial wellness starts at home. By teaching kids about money from an early age, you equip them with essential skills to navigate their future with confidence. Whether through pocket money, budgeting games, or real-life lessons, every small step helps shape their financial future.

Remember, it’s not about being perfect. It’s about starting the conversation and building lifelong financial habits.

Do you have any fun ways you teach your kids about money? Share your experiences in the comments!

By Brett Tarlington