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Kids and money | How to develop better habits early on

3 February 2021 | 4 min read

Did you know that kids as young as three are able to grasp the core concepts of saving and spending? By the age of seven we’ve already started forming money habits.

“So where do I start?” you ask. Here are some tips to get the conversation started in your household.

Keep it simple

Trying to educate your kids about money through a one-hour lecture on everything from credit cards to home loans is likely to overwhelm and bore. Instead, start small.

For the little ones, counting coins or playing store at home, are micro ways to expose their brains and fire their imaginations with the broad notion of exchange and money – this for that – cause and effect.

Then when they’re a bit older…

Money and limits

One way you can introduce your kids to the important concept of money exchange is by doing a small grocery shop – online or in person – and work to a set amount of money and a short list of items.

Once you reach the limit it’s time to make decisions about what we keep and what we have to put back. This is a good way to demonstrate the complex concept of cause and effect in relation to money and the simple fact that things cost money.

(The practical aspect of the demonstration will have the added impact of real outcome when you get to take the shopping home, or when it arrives at your door).

Open a bank account for your child

Your child can have a bank account form birth, which not only familiarises them with the concept of money, but also allows a space for them to see their money grow. Our PiggySaver account can help teach kids under 12 to save. With bonus birthday rewards and interest, plus no monthly frees, having an account can be an engaging way for children to understand concepts like savings and interest.

For more information on kids and money, speak to your local branch.

Pocket money

Understanding the value of a dollar by earning it, is one of the best ways for kids to become acquainted with money.

So the next time your child asks you for the latest shiny thing they desperately want, give them a list of chores with set values and let them earn it. This way they will start to learn the satisfaction associated with working towards a financial goal and achieving it.

Depending on your child’s age and your circumstances this item could be relatively small or quite significant (Beyblade/smartphone cover/smartphone – this lesson has flexibility) and could last weeks or months.

Offer rewards for reaching their goals

For more significant goals, to keep them motivated, try giving them special rewards along the way. For instance, once they reach halfway you might offer to cook their favourite meal (curried sausages, thanks for asking!) or allow them extra time on their favourite game or device.

Be open with your children

A great principle for life, but especially when it comes to teaching them about money.

Are you currently saving for a big purchase, like a car or perhaps a holiday? Be open with your kids and take them along with you on the savings journey.

Creating a budget that you put on the fridge and update regularly the closer you are to your goal.
This way your children will be involved and excited with the challenge of saving (and be doubly appreciative when it comes to reality).

Have fun

What you might have thought was going to be a daunting course of boring talks could turn out to be a really enjoyable experience.  


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Bendigo and Adelaide Bank Limited, ABN 11 068 049 178 AFSL / Australian Credit Licence 237879. Any advice provided on this website is of a general nature only and does not take into account your personal needs, objectives and financial circumstances. You should consider whether it is appropriate for your situation. Please read the applicable Disclosure Documents before acquiring any product described on this website. Please also review our Financial Services Guide (FSG) before accessing information on this website. Information on this page can change without notice to you.

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