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5 Key Money Lessons To Teach Your Children

kids money lessons

Right now, there are over 16 million credit cards (and 46 million debit cards) in Australia, and they’re accruing a national debt of $31,664,835,069, according to Debt is an issue, and a reality for most households in the country. This is why we need to start teaching our kids about money at a young age.

Teaching kids about money can be a foreboding task for many parents, but it’s important to ensure kids understand personal finances early on so they have a solid start to their financial education. So, we’ve found easy ways to approach five money topics with your kids, no matter what stage of life they’re in.

1. What is money?

Firstly, kids should have a basic understanding of what money is, as well as its value.


From a young age, kids are learning about money simply by watching you make transactions. Start by showing your kids the different types of physical money you can use to purchase things. You can break the currency down for kids easily via numbers, or if they aren’t old enough to count, you can show them which colour or coin size is worth the most.


At this age, teens will likely be well versed in how transactions work, so why not give the reigns over? Consider giving them some cash while at the shop so they can practice paying for the groceries or a loaf of bread from the bakery, this will also be a great education in what it feels like to hand over money.

2. What is money used for? 

After you teach kids about what money is, it’s time to teach them what it’s for.


Most young kids start to get excited about things they want around the age of three, so it will be important to show them what money is for. Simply explain that everything you purchase – like your groceries at the shop – aren’t free and the more items you have in the cart, the more money you will need to purchase them.


The older kids get, the more they’re going to want to buy, whether that be products, services or experiences. This is the perfect time to explain nearly everything will cost money, and that money doesn’t grow on trees.

3. Ways to earn money

So, if money doesn’t grow on trees, where does it come from and how will your kids get some? Now is the perfect time to discuss that money must be earned.


Toddlers aren’t yet old enough for chores, but a good way to broach this subject with your young children is to explain why you have a job, what you do there and how you earn money from going to your job. As your kids start to get older, they can start helping around the house so they understand how to earn money and what it’s like to have their own.


As your kids reach teenage-hood, it’s important to encourage them to get a job so they can earn their own money. However, a good financial education also includes understanding the ins-and-outs of actually getting a job – they will need to look for a position, write a resume to apply, have an interview and then have the discipline required to prioritise work over more fun weekend activites.

4. What is an ATM?

Showing your kids how to use an ATM is a good way to help them understand how they can access their money, but you can also discuss the benefits of a savings account.


For toddlers, try to focus on the smaller, more easily understandable aspects of withdrawing money from an ATM. Consider showing your toddler your bank card and explain how the machine will read it to show your account balance, and explain that once you take out money, the number on your account balance will go down.


At this age, you should allow your teen to take over at the ATM. If they have their own savings account, you can start by showing them how to use an ATM to access their money. If they don’t have their own savings account, then show them yours.

5. Ways of payment

Finally, because the world largely runs on credit cards, it will be important to teach kids about this ‘invisible’ form of currency and how it works.


The concept of debit and credit might be a little confusing for young kids, so this will be a good lesson to teach after you show them around the ATM. Show them the two types of cards (debit and credit) and explain that even though you can’t see the money, each card represents money – money you have and money you don’t have and will need to pay back.


As your kids grow into teenagers, it’s important to teach them the difference between credit and debt cards, focusing on the fact that irresponsible spending on credit cards can lead to debt. Explain that credit cards are a helpful way to pay for things over time, but that you must be able to pay them off in full, and, the longer it takes, the more it is going to cost (aka interest).

It’s never too early to get your family interested in learning responsible money habits. If you want to open a savings account for your child, BOQ has savings accounts for kids so they can start their financial education early. Head into your local branch to get your kids started today.

This blog post is for general information purposes only and is not intended as financial or professional advice. It has not been prepared with reference to the financial circumstances of any particular person or business and should not be relied on as such. You should seek your own independent financial, legal and taxation advice before making any decision about any action in relation to the material in this article.


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