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  • Writer's pictureReal Finance

How to teach personal finance to your kids

Updated: Sep 2, 2022

Simplified financial literacy techniques that can prepare your kids for a financially independent future.

Parents play an integral role in shaping values and behaviours of their children. The same can be said for matters relating to finance. Thus, as parents, it’s crucial to demonstrate and educate personal finance management techniques to them.

Financial literacy is a life skill that education systems around Australia lack in delivery. In fact, there's no specific financial literacy strand within the Australian Curriculum. This means that students aren't being taught skills for financial management.

According to a 2019 study by Raiz, 25% of parents received very little or no financial education from their parents. That’s a quarter of the population who're potentially lacking basic financial literacy skills.

As hardworking adults, we understand that life gets busy. You may be working hard to fulfill your own financial responsibilities. Though, experts suggest that it may be beneficial to open this space for family discussion in order for kids to grow and learn.

So, how do you teach kids about personal finance and finance management?

We’ve collated some of our favourite techniques for teaching your kids about money. They're pretty simple and there are readily available resources online to support them.

How money is earnt

As much as we’d love money to appear out of thin air, we need to be realistic when teaching our kids where money comes from. From an early age (between the ages of six to ten), you should be teaching your kids that money is earnt.

Children should learn how money is earnt
Children should learn how money is earnt

Children should be taught about how to prioritise earnings for spending. Thus, we need to demonstrate the importance of spending money on necessities (our needs). Anything that’s left over or saved should be put towards our wants.

Hot tip: to expand their knowledge around earning, reward them with pocket money for doing chores and supporting you around the house.

Teach them how to budget

Further to the above, from the ages of around 11-13, children should learn the basics of budgeting. This will help them to get specific on learning how to prioritise their earnings and how to spend it. Specifically, distributing earnings amongst their needs and wants.

The Australian Government have created a free online resource tool, via, for budgeting and creating budget planners. You can access this tool here.

Involving your children in conversations around your own budgets for your personal finances can also allow them to enhance their knowledge through firsthand experience.

How to pay bills

You’re paying bills all the time. So, why not show your kids how this is done? More importantly, while you’re doing it, explain why you need to pay bills. In a Money Makeover article by finance expert, David Koch, David explains, that bills are “day-to-day items, which are often taken for granted, do have a value and shouldn’t be wasted.

Showing them how money works when shopping

Involving your children in your weekly grocery shop, or any shopping for that matter opens opportunities to learn about the following:

- Comparing products and their prices

- Searching for better deals to save money

- Teaching them how discounts work

Creating money goals

Money goals should be taught and practiced from an early age. This will allow your kids to save money and prioritise their spending. It will also teach them skills along the way that are imperative for understanding what they need to do to achieve their goals.

We won’t discuss how to create money goals in this article. Though, you can click here to access our CEO’s five steps for financial goal setting.

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