We live in a time of online shopping, internet banking and credit cards. This can make it a little difficult for children to gain smart financial habits as money can seem invisible and endless.

When it comes to life skills, it’s really important to give our children a strong financial foundation and help them to see that money is real and teach them the importance of smart financial habits.

In fact, according toa report by researchers at the University of Cambridge, children’s money habits are formed by age 7.

How can I teach them?

Talk to your children when you’re going about your daily tasks. For example:

  • When you go to the ATM – this money is coming from my account. Explain that you have to work to get money, the bank doesn’t just give it to you. It stores what you have earned until you’re ready to use it.
  • At the shops - two different stores may have the same product but at different prices. Discuss how important it is to shop around to make sure that you get the best price for something.
  • When you receive a bill – using the television and the internet costs money. How many days of work does it take to pay off your electricity bill? Help them to see the connection between work and money.


When you work out the family budget, involve your children. Discuss where your money should go and where it needs to go. Also, discuss the difference between need versus want, and help them to set goals and really think before spending. Help them to understand the importance of finding the best price, by conducting research online or shopping around. This will also help to curb impulse spending – something I personally need extra help with!!

Here are a few examples of ways to involve children in creating a budget:

  • Birthdays – have your child help create the budget for the next family birthday – factoring in ALL the costs – food, entertainment, party favours etc.
  • Holidays – plan and budget for travel, hotels, day trips, food, petrol etc
  • Create a shopping list of essential household items that are needed.
  • When your child receives their first mobile phone, show them how to check and minimise their data usage so that they don’t run out. (or worse, spend $100s)

Here’s a great link for children to create their ownbudget. You can even use it yourself!


Pocket money

The easiest way to help them to learn how to manage money is to give them some. They will quickly learn the consequences of overspending if you let them blow all their money on sugary treats only to find that now they can’t afford the latest game they absolutely MUST have!

Giving pocket money also helps to instil a good work ethic in children. They only get paid for certain jobs and only if it’s done properly and completely. Paid jobs could be vacuuming or washing the car. Unpaid everyday family jobs, would be setting the table, making their bed etc. This also teaches children independence, patience and goal setting.

Talk to other parents if you’re unsure how much money to give or what jobs to assign to each child and then come to your own conclusion. Every family will be different.

Pocket Money Apps

You can pay pocket money into a bank account or piggy bank and there are now companies likeSpriggythat have an app and a credit card for children, so that they (and you!) have full financial transparency. They can see what jobs they’ve earned money for, where they have spent their money, they can also set savings goals and see how close they are to reaching them.


Savings accounts or even saving pocket money in their piggy bank can teach children about delayed gratification and help to combat the buy now - pay later mentality. A savings account can also show children that good things come to those who wait, and money can grow simply by keeping it in their account. (compound interest)

Here is a really usefulsavings goal calculatorto use with your family.


Three jars

I love this idea! Save 50%, spend 40% and donate 10% to charity. It doesn’t have to be that exact split. You can sit down with your child and work out how they want to split up their pocket money. They could even invest a small amount.

 You’ll find as your children grow, they’ll be new opportunities to teach them about finances, for example when they receive their first paycheck.

I know that it’s not always easy to talk about your finances or sometimes money in general, but by doing so, you’ll create financially savvy kids….and who doesn’t want that?!

How do you teach your children about the importance of smart money habits?



1 comment


And make sure you as a parent don’t have a credit card or an afterpay account. I teach my child if you don’t have the spare money for it right there and then you can’t afford it, so don’t buy it!!

Leave a comment

Please note, comments need to be approved before they are published.