How to talk to kids about money

Brought to you by the Financial Planning Association of Australia

It’s not easy to talk to kids about money, especially when you don’t feel money savvy yourself. Do you remember the first conversation you ever had about money? I can’t recall how old I was exactly, but I definitely remember my parents sitting me down for a demonstration featuring miniature towers of coins and some apples and oranges from a nearby basket. The more fruit I gained, the fewer shiny coins I had in my possession.

Whatever your experience, there’s every chance that as a kid you developed a better understanding of how money works than kids do today. They’ve been coined the “Invisible-Money Generation” in a report released by the Financial Planning Association rel=”nofollow” (FPA) of Australia.

Share the dream

The Share the Dream report talks about how technologies like online transactions and ‘tap and go’, are creating new challenges when it comes to teaching kids the value of money. It’s not hard to see why. It’s so much easier to attribute value to a stack of gold coins on the kitchen table than a few digits in a banking app, which (at least to my kids) looks more like a pretty calculator.

The truth is the way we talk to kids about money better prepares them for the future. Despite this, 66 percent of parents say they are reluctant to broach the subject with their kids. 

As a financial planner and parent, I make a point to have open conversations about money with my daughters intertwined with everyday life. ‘How do we earn it’, ‘how do we maximise what we earn’, ‘how to save for the big things’.

The more they know, the more they will be empowered.

Some tips on how to teach children the value of money

I remember when my girls were around the age of 10, they would ask for a new pair of designer shoes. At that time, they got a weekly allowance of $20 each. The cost of the shoes was $80. Rather than just buy the $80 pair of shoes, or whatever else they had their eye on, I would ask these questions:

1. Do you need this right now?

2. Are you prepared to save your $20 weekly allowance towards the purchase of this, and can you wait 4 weeks?

3. If not, what extra jobs are you prepared to do now to get closer to owning this thing you’ve got your heart set on?

And then I say: ““To have everything you desire in life is achievable, and it all comes down to the decisions you make. How much effort will you invest into achieving the things you want? You are your most valuable asset.”

“To have everything you desire in life is achievable, and it all comes down to the decisions you make.”

Modelling the right kind of behaviour

Having money conversations with your kids can make a positive difference to their financial future. The first step in putting kids on the path to financial literacy is to reflect on our own attitudes toward money.

For example, did gender play a role in how money was managed or spoken about at home? Was money a taboo topic? Perhaps you recall your childhood money conversations as practical and cheerful?

The last thing we want as parents is for our worries to weigh on our kids.

Creating positive money memories for children starts with modelling good behaviour.

Planning for the future can alleviate anxiety. If you find planning tricky, start small and ask for help. Knowledge is power. Surround yourself with professionals in the know.

The Share the Dream report also revealed that “parents who seek or have sought advice from a financial planner in the past were more likely to have regular chats with their kids about money than those who do not (61% compared to 43%).”

How to talk to kids about money - advice from a financial planner and mum

Empowering kids towards financial success

Building a positive attitude around work will also help empower kids to have more agency in their own spending.

Start with some pocket money for completing age appropriate household tasks. It’s also a good idea to encourage your kids to look for casual work when they’re old enough.

The Share the Dream report found children with a paid job are more digital money savvy.

Eighty-four percent make online purchases for themselves or their family, versus 56 percent of those without a job. Who knows, they might even be able to teach us a thing or two.

How to Talk Money with Children

For practical tips and expert insights on how to talk to kids about money, click here to download a free copy of How to Talk Money with Children eBook.

Do you find it easy to talk to kids about money?

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Fran Hughes

Fran Hughes is a Money Coach and Founder of Intuitive Money, International Speaker, award winning CERTIFIED FINANCIAL PLANNER, CFP®, with over 30 years of experience. She is an active member of the community as the Financial Planning Association (FPA) Chapter Chair and future2 Foundation Grants committee member. She pops up from time to time in the media and radio, but mostly Fran loves working with clients.

When not coaching clients around money matters, Fran is a mum to two daughters, wife, businesswoman, humanitarian, urban athlete and loving life!

12 Comments
  1. We try and talk to our kids about what things cost as much as possible so they become aware that everything costs. We are slowly introducing chores and showing them how long it takes to save for things. Definitely a good idea about getting a job, I think that makes a big difference.

  2. We try and teach our 4 year old about money but you’re right – it’s hard when everything is on credit card. I’ve been wondering lately what age is appropriate to start giving pocket money – can they be too young?

    1. I’m not sure what Fran would recommend, but I don’t think there is a “too young”. If you think your 4-year-old is ready for a little bit of money management, it might be fun! I used to play shops with Lottie after she “earned” money helping me in the kitchen. So, pretend money worked for her at that age, but who’s to say real money isn’t a good idea too!

  3. Money is definitely a daily conversation here with my kids.
    I only use cash when the school asks for random amonunts though. I may need to rethink this. But I do love the app we use to sort pocket money. My kids have become pretty savvy savers and hopefully they will be saved from the mistakes
    I made in my youth because I had no idea

    1. Are you using Spriggy, Toushka? It’s an app that was recommended in the Mumlyfe group and I’m keen to try it with my kids. I wonder if just getting them debit cards wouldn’t amount to the same thing though…

  4. Great article, I didn’t have much advice growing up and as soon as I was getting any sort of money I had a credit card, that was the beginning of the end. Now with my own children I’m so focused on teaching them value of money and how to handle it. I really want them to leave home on the right foot financially.

    1. Me too! I’m so conscious of skilling them up so hopefully they will be much better at living within their means than I was when I first left home. I’m much improved now, but I suspect that has more to do with my husband than me!

  5. Hi Fran. Thanks for your thoughts about this topic. I would say that we are very open about talking about money in our family. I like how you have broken it down into easy categories on how to approach the everyday issues surrounding money. I find this especially important as my children get older.

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