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Financial Literacy for Kids | Money doesn’t grow on trees!

If you’ve got a case of the ‘gimme gimmes’ in your house, perhaps it’s time to try promoting financial literacy. Teaching kids about finances can save you cash and encourage them to feel grateful about what they already have. Here’s how.

How’s your savings account looking?

According to a 2016 report from the National Australia Bank:

  • 1 out of every 2 people have limited savings
  • 1 out of every 10 people have NO savings at all
  • Over 17% of the population are over-indebted and can’t meet their repayments

Ouch. Sound familiar?

Our approach to money, and how much control we have over it, is largely shaped by the approach our parents took. Managing the household budget begins at home so the lessons we learned (or didn’t learned) influence our spending patterns today.

It’s important to instil in our children a sense of financial literacy – empowering them to have control over their financial situation and to understand the true value of a dollar. Hopefully, this sense of autonomy will allow them to grow that one dollar into a money tree whose branches they’ll be able to shelter under for years to come.

How can we teach financial literacy to our kids?

To be financially literate is to have a sound sense of financial knowledge, a control over numeracy and a healthy financial attitude. Imagine it like learning a language. The earlier these patterns start, the more likely they are to continue and the stronger they’ll be.

Many of today’s parents feel financially inept or out of control. It’s easy to assume, then, that they may believe they have no capacity to teach their children about spending. After all – how can you teach a skill that you’re not good at?

This daunting task can be approached by breaking it down into a few practical examples. If parents can learn effective approaches, healthy modelling behaviours and use appropriate language then the financial lessons they instil in their children will have a positive impact.

Don’t know what you got ‘til it’s gone

Children must learn that currency has value. Once it’s spent – it’s gone! Unless you’re nobility (if that’s the case, good morning your majesty!), you can safely assume that your access to funds is not a bottomless pit of wealth. Children must be able to understand the finite capacity of the wallet and adjust their behaviours accordingly.

I want the world! I want the whole world!

Settle down, Veruca Salt. Another conversation that parents can have with their children to promote financial literacy is to explore the differences between needs, wants and ‘splurges’. Parents must enforce, through words and actions, that a healthy approach to finances means planning and consideration rather than spur-of-the-moment spending.

It’s important to teach moderation to children. If you give in to every request, not only will your wallet suffer but so too will the sense of entitlement that will swell in your child. Saving ‘splurges’ for special occasions and not giving in to every request will be a valuable lesson in both restraint and gratitude.

Choose your language carefully. There’s a difference between, “We can’t afford that” and “We choose not to spend our money that way”. The first indicates that if you had more money you would blow it on that product. The second indicates that you consider your choices and plan your life according to a variety of factors.

Money, money, money!

Consider how you spend at the cash register. Children are like sponges – always watching and often dirty. Always ready to soak up the messages about the world around them.

Teach your children about how you spend by involving them in the process at the checkout. Cash is a more obvious way to pay but, as that’s becoming rarer, paying by EFTPOS offers the opportunity to speak about how you use different accounts.

Taking children with you to the ATM is also a visual way of exploring how money works. They’ll be able to see funds and balances on screen which will make more connection than just swiping a magical card that means nothing to them.

Take an old-fashioned trip to the bank. Talk to the teller, make a deposit, make a withdrawal. Banks are always keen to get younger customers in (remember your Dollarmite account?) so you’ll often find a customer service representative who is happy to speak to your children. Financial literacy in your house might mean opening a savings account and exploring the idea of interest and how it can grow money.

A sneaky tip from Families Magazine – why not encourage your child to start their own small business? 

Financial literacy in the wild

Don’t feel like you must take on the full burden of teaching your children the ins and outs of the finance world! If you’d like to outsource, you could try:

Look out, sharks!

A big part of financial literacy means encouraging critical literacy and being aware of scams and phishing schemes. Scammers know all kinds of tricks to get you to hand over your money.

Here are some practical things ways to protect yourself and teach your children about being wary of scammers:

  • Teach them to ask questions rather than accept things at point blank
  • Teach them to protect their personal information online
  • Keep an eye on what’s being downloaded and do regular virus checks
  • Teach them to never give out personal information over the phone and to be wary of telemarketing calls
  • If it seems too good to be true – it probably is!

Teaching financial literacy to kids to help their money trees grow

Becoming money smart from a young age truly is the gift that keeps on giving. Allowing them to lay down these roots now will pay dividends in future years and mean that your children will have the best economic start possible.

Written by: Sanjay Bhai, Humanities and Social Sciences, Southern Cross Catholic College.

This article was published in Issue 23 of our print magazine, August/September 2017.

Photo of author

Janine Mergler

Janine Mergler is a veteran Queensland teacher, graduating from QUT with a BEd majoring in Social Sciences. After many years in the classroom, Janine moved on to academia. She has proudly trained new generations of teachers in her role as a lecturer at Queensland University of Technology Faculty of Education. She has also worked in the Queensland Government as an education specialist, developing education resources and delivering community awareness programs to help families conserve water. Currently she is the owner and editor of Families Magazine, a publication specifically targeted at parents who value a quality education for children.  Janine leads a team of professionals who write about family lifestyle, early childhood, schools and education information and family-friendly events.

1 thought on “Financial Literacy for Kids | Money doesn’t grow on trees!”

  1. Every child needs to understand the difference between wanting something and needing something. Children want instant gratification, but creating opportunities for delayed gratification is one of the best gifts parents can give children.


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