Teaching young kids money lessons that stick
Written and accurate as at: Sep 15, 2025 Current Stats & Facts
Financial literacy isn’t always something that features in the school curriculum, but it’s arguably just as important as any subject your kids will learn. As a parent, there are plenty of opportunities in daily life to teach your kids good money habits. And the sooner you start, the more confident and capable they’ll be.
Start early and make it rewarding
Children’s awareness of money starts surprisingly early, as anyone who’s played pretend supermarket with their pre-schooler can tell you. And there’s no better way to nurture those first sparks than by introducing pocket money into the mix.
It’s common for parents to give money as a reward for doing chores around the house. But this risks fostering a transactional mindset, where your kids are only motivated to help out if there's money on the table. Instead, think about introducing a tiered payment system, in which your kids are given a regular allowance for general good behaviour and then a supplemental allowance for doing extra jobs.
Tying money to effort and hard work in this way can help your children appreciate its real-world value. All of a sudden, money goes from being something in seemingly infinite supply to a limited resource that needs to be managed wisely.
Don’t shy away from talking about money as a family
Another way to demystify money is to simply talk about it, both with your kids and around them. They might have a vague idea about how it works but do they grasp how choices, tradeoffs and priorities factor into everyday spending?
Kids learn a lot through observation, so try to model good financial behaviour and be open about the reasons behind your decisions. That might mean explaining why you’re picking one item over another at the supermarket, or why you sometimes have to refuse when they ask you to buy something.
You might even feel comfortable discussing personal mistakes (like items you paid too much for or regret buying), but there’s a delicate balance you’ll need to strike here. On the one hand, you don’t want to let a good learning opportunity go to waste. But you probably don’t want to burden your kids with complicated or potentially stressful matters either.
Get them a bank account
One of the most important lessons your children will need to learn is that the money they make isn’t just for spending, it should be saved too. And while a piggy bank can do the job while they’re young, eventually they’ll need something a bit more sophisticated.
Opening a bank account for them and encouraging them to interact with it regularly can get your little ones in the habit of setting goals and tracking their progress. Try to draw their attention to any interest they earn too, as this can be both motivating and educational.
Help them save once they start earning money
The true test of how successful your financial coaching has been will come once your child graduates from doing chores around the house to working their first actual job. Do they spend the money they earn mindfully? Can they distinguish between needs and wants?
Of course, there are still things you can do to encourage positive financial behaviours. For example, you could offer to match any savings targets they reach (or if they’re particularly savvy, any money they invest).
It might also be worth warning them about misusing credit and digital money. Between online shopping, contactless payments, and video games with downloadable content, technology has made it incredibly easy for people to spend without thinking.
Helping build awareness of these potential spending traps can help prevent any bad habits from forming down the track. And it might even prompt you to be a bit more mindful with your own spending too.
