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Why it’s never too early to teach kids about money

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Ten tips for talking money with your kids

When is a good time to start teaching children about money? The answer is as early as you can.

Research shows that kids as young as three can grasp basic money concepts – by seven their habits are already set. So we owe it to our kids to start educating them about money early to build their confidence, awareness and resilience around this critical aspect of life.

Especially after the events of this past year.

The sooner you start discussing the value of money and saving and spending wisely, the earlier children will develop critical skills to help them build good financial literacy. Adults, particularly parents, are children’s greatest role models. We teach children manners, respect, acceptance and many important life lessons, but few of us teach our children how to manage their money – one of life’s most important skills.

A good place to start is to think about and examine the attitude towards money you may be exhibiting to your children:

  • How is money spoken about in your household – positively or negatively?
  • Do you keep track of your money and do you explain this to your children?
  • Are you in control of your finances or are your finances in control of you?


To help you start the conversation, here’s our top ten tips for talking about money with your kids. 

Needs vs wants

A good place to start is explaining the difference between needs and wants. Put simply, a need is something you must have to survive; like food, water and a home. A want is something that’s nice to have, but you can live without; like an ice cream or a new skateboard. This is not just a great financial lesson to learn. It’s a great life lesson too.

Change the script

The way we talk about money is formed from our conversations we had with our parents or influential adults as kids. It’s handed down through generations. We’ve all caught ourselves saying, “Money doesn’t grow on trees you know” or “We’re really feeling the pinch”. It’s hard to break these scripts but try to do your best to avoid them as they can create a negative view of money when talking to kids. If you’ve experienced a loss of income and need to reduce spending, it’s far better to speak calmly with your kids about the situation and avoid the emotive language. In that way they’re more likely to be reassured and less anxious, and form more constructive attitudes towards money.

Click here for our tips on teaching teens about finances and money management

Make it normal

The more we ignore something, the bigger problem it becomes. If money isn’t talked about in the household, our kids won’t be equipped to handle the challenges later in life when they have more to spend, or less. A great place to start is around the dinner table, where we talk naturally about days at school, sport, friends. So talking about money should be just another topic of conversation, like what chores they could do to save up for that special toy; or how dropping down to just one takeaway meal a month will help us take that big family holiday. Involve them in these money conversations so they can be active in these decisions and feel good about saving and spending money.

Save for a rainy day

Saving is an important concept to teach kids. It develops a habit into adulthood, where having an emergency savings fund creates a sense of security and empowerment. We can teach our kids to save for an item they want to buy themselves. Have a jar, box or piggy bank in their bedroom to encourage the savings habit. It’s also a great idea to deposit savings into the child’s own bank account via a banking app or take them into a bank to deposit cash so they can see their balance building.

The Australian government’s MoneySmart website has some great tips for teaching kids about money.

Get kids involved

Get children involved in saving money on bills by showing them water and electricity accounts and talk to them about how to make changes (taking a shorter shower, turning off lights and turning appliances off at the power point for example). It’s a pretty powerful lesson to see how making a few small changes in lifestyle habits can have a large benefit not just for the family in creating savings, but also for the planet in reducing the use of resources. 

Keep it fun

Every kid loves books. And there’s plenty of books you can borrow from the library that focus on themes around money, beginning with picture books for the really young. Books like Bunny Money by Rosemary Wells and The Berenstain Bears Get the Gimmies These stories are fun and engaging, and provide another way that you can introduce money concepts into your conversations. And as they get older, you can introduce them to new age-appropriate books to continue expanding their financial appreciation and awareness.

Would you like more recommendations for money-themed picture books? See Goodreads.

Make it meaningful

As well as saving and spending, you also have the chance to teach your kids from an early age the importance of giving. Talk to them about some of the causes you support and why, whether that’s regular donations you make or a specific cause that’s important to you. You could set up saving, spending and giving jars; or set up a special savings account for giving that they could use towards something or someone that’s important to them. This can be an invaluable life lesson, and one that is likely to stay with them as they grow older.

The Good Cause has a great list of Australia’s best rated charities.

Set a goal

Setting goals with your kids teaches good money management habits and the value of working for money. Work with them to set goals that are achievable and realistic – and recognise when the goal has been achieved. Write down the goal and display it somewhere your child can see it. Track their goal and positively reinforce progress.

Do it together

It’s a lot easier for your kids to start learning the value of money and saving if you do it together. Let’s use the example of the big family holiday. Talk to them that to travel overseas, we need to pay for extra things like plane flights and eating out and staying in hotels. So we need look at extra ways we can all save money as a family. Maybe set a weekly or monthly saving target, and work out you can all work together to achieve this goal. It’s a great way to introduce them to budgeting and saving, and make the process fun and exciting.

Involve kids everyday

Always look for ways that you can involve kids in money decisions – big or small. As kids are constantly learning and observing, don’t shy away from exposing them to opportunities around you. That could be in the supermarket asking them which item is on special and why it might be better to choose that one over this one. It could be them joining you when looking for a new car and talking about why one car is more expensive than the other and how this influences your decision. Or it could be helping you barter with a villager in Bali while on holiday and explaining how this is different to buying something from a shop at home. All these experiences can shape and evolve how your kids think about and value money.

FPA Australia has put together a great resource with more tips and insights for talking money with kids

At Tribeca, we know how important a family’s financial wellbeing is. If 2020 has taught us anything, it’s that we need to be more open than ever before in supporting each other, and that goes for those tricky conversations around money with our kids.

Money skills are critical life skills. Start as early as you can to help kids develop good habits and knowledge from an early age. Foster those skills throughout young adulthood and support your kids to build financial literacy which will lead to better financial decisions throughout their lives.

We’re always ready for a chat about your family’s financial wellbeing, from assisting with cashflow and budgeting to simply talking about money habits. Whatever financial advice you need, our Tribeca Tribe are here to help. Contact us today.

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