Teaching kids about money

Do your kids think money comes from the ATM or float free on the internet? Relax, you’re not alone. In a world where money is becoming more and more invisible, it can be hard for kids to grasp the basic concepts of where money comes from, what you use it for and all the different ways you can ‘spend’, often without any actual cash changing hands. It can also be hard for them to realise that, for most of us, there is a limited amount of money available.  So when is the right time to teach your kids about money, and what do they need to know?

The sooner the better

When you start establishing the building blocks for good financial management will largely depend on their age, their interest and your own individual situation, but mostly the answer is now. At every age, there is something our kids can learn about money and how to manage it.


Pre-schoolers may have little to no interest in your spending habits until they can’t have the toy they want today. This is a great opportunity to start explaining that sometimes we have to save up to buy the things we want. The message may need repeating over time but this is laying a great foundation for a key financial truth that some adults may still struggle with. You may also notice pre-schoolers taking a cue from you and role playing shops or supermarkets, generally with some kind of exchange at the checkout. This is a great basis for understanding the transactional nature of a purchase – ‘I’ll give you this and you give me that’. Good start!

Primary school

When your kids hit school there are a couple of key things for them to understand. One is the physical aspect of money. What is Australian currency? How does it all work together? Learning to identify coins and notes and understanding that two 50 cent coins are worth the same as a single one dollar coin is a big step in the learning process. Good opportunities for these discussions are around pocket money (if you give your kids pocket money), or if you give your kids money for the school canteen – try mixing up the denominations.

The second key thing at this point is getting their heads around the fact that, generally speaking, we have a limited amount of money at our disposal and that we need to choose carefully how we spend it. This can involve discussions about needs (such as food, water, shelter) and wants (iPad, skateboard, lollies). It will probably also involve some discussion about how we earn money AND how we access it.

In summary

As your kids get a bit older you can teach them about setting savings goals, working out a savings plan and saving regularly to reach a certain amount. Use a goal setting sheet and a savings calculator to help. Interest can be tricky to understand, but perhaps for now can be explained simply by saying that the bank pays you to keep your money in a savings account.

Learn more about the IMB Bank Kids Zoo Account

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Important Information

Important Information

This article has been prepared by IMB Bank and contains general information only. It is not intended to be relied on as advice. It does not take into account your objectives, financial situation or needs. You should seek your own legal,  financial, taxation or other professional advice before you make any decisions about your business. Consider the relevant Terms and Conditions or Product Disclosure Statement and Target Market Determination available here before deciding whether to acquire any products or services offered by IMB Bank. Lending criteria, terms and conditions, fees and charges apply to IMB loan products.