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There are many resources available to help parents talk about money with their kids, yet many parents still find it challenging.

Many parents do not know how to talk to their children about money, what they should be saying, and when.

What’s more, our accelerated, invisible–money world is making it harder for children to grasp its value.

According to FPA’s (Financial Planners of Australia) “Share the Dream” survey, nearly 65% of parents believe their children’s generation will be financially worse off than their own.

Having money conversations with your children can make a positive difference to their financial future.

Teaching children about money can be a challenge. So how do you pass on good financial values early on? Clinical child psychologist Emma Spencer shares her advice for three stages of childhood.


Children (aged 4-8)

Talk about where money comes from and how you earn it.

At age three to five, children are mentally developed enough to start learning what money is for, where it comes from and why we need it. Explain the relationship between adults going to work and being able to buy things for the family.

Explain the difference between needs and wants. Teach your children what is a necessity and what is a luxury—and to explain that even basic necessities need to be paid for

Don’t mollycoddle your kids. You can’t shield them from reality and then expect them to go out and become resilient humans. If they run out of pocket money before the end of school holidays, don’t give them more. Children need to be taught how to become independent.

Show good financial practices. Include your kids in tangible money activities because children learn by observing and imitating adults. For example, let them sit down with you and watch you pay bills — in paper or online — and show them the family budget. If you’re out shopping and you need to make a choice between two items, talk to your child about which one you are choosing and why. Money talk is easier when it’s about everyday things.


Tweens (aged 9-12)

Never just give your kids money. There’s no lesson in just handing them money. They need to understand that money is earned, and certain things have to be paid for.  Pocket money is “earned” money from parents, it’s not an “allowance”. Establish a list of basic daily chores, and also weekly and monthly age-appropriate chores for which the kids earn money.

Help your tween budget their pocket money. Give your tween a budget. With a budget, they can learn to plan, and hopefully, not spend money they don’t have.

Digital purchases: Be sure your tweens understand that online and digital purchases are made with real money, and those choices need to be budgeted just the same.



Work for it: Encourage your teen to get a part-time job. There’s so much to be learnt from a part-time job aside from money. Building connections, learning responsibility, customer service skills and manners are important stepping stones to adulthood.


Warn teens against buying things on credit. Speak to your children about the pitfalls of buy-now-paylater shopping. Instead, encourage them to save for what they need, and not to go into debt for something they want.

Encourage your teen not to spend all their money on treats and socialising. Unless they are going out for a planned social occasion, encourage them to eat at home and pack their lunch as a good way to save.

Let them make mistakes. As parents, you can encourage sensible decisions based on wants and needs, but apart from that, teenagers should learn for themselves. If your child ends up in debt, as a parent you would naturally want to help them out. But experience is a great teacher.


Extracts from “HOW TO TALK MONEY WITH CHILDREN” – Financial Planners association of Australia.

Joe Stephan

Director, Stephan Independent Advisory

Joe Stephan graduated in 2002 with a Bachelor of Business (Fin Plan) under the tutelage of his father (Program Leader of Financial Planning at RMIT University).

You will hear Joe bandy about the idea of “pure financial advice”, which is given objectively and focused around the needs of individual and not the internal needs of the business providing advice.

Joe is realising his vision every day through his Independent Advice Firm which he owns and operates with his brother James. Joe also spends a portion of his time teaching tomorrow’s Financial Planners at various Melbourne Universities including RMIT & LA Trobe.

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It’s Never About Money

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