Educating children about money


By Emily Chantiri

In today's society it's definitely a challenge for parents to educate children about money, particularly as our children are growing up in a world where money pops out of any ATM machine as if by magic.

Money exchange takes place in the form of transfers over the phone or website and payments made using plastic cards.

In this virtual world of money exchange it can be more difficult to see and grasp the concept of where the money is coming from and how it can be saved and how we can afford to spend it.

To illustrate this further, a few years ago when I was out with my son, he asked me to buy him a toy; he was 3years old at the time. I refused and I said I had no money and each time we passed any old ATM he would run up to the machine and demand I take money out of it. He just thought anyone could get money from a big hole in the wall…try explaining this to a 3 year old!

It is easy to see how children may grow up not understanding the basic savings and managing their cash flow and their money. The scary thing is that most will get credit cards before they have practiced the basics of earning and managing their money.

The best way to help educate your children is start when they are young. This could be as simple as opening up a bank account in the name of your child. The Commonwealth Bank has one just for children with no fees. Savings accounts are good because they teach children to be disciplined by putting money away, plus they get a kick out of watching their money grow.

A friend of mine has bought shares in the name of her daughter. The only problem if you do this is your child will have to lodge a tax return. Her mother bought the shares several years ago and invested into blue-chip companies. These are companies that are relatively stable and return dividends, like Commonwealth Bank and BHP. Over the period the shares have done well and her daughter loves the fact she has shares that are performing well. You could also buy shares in your name for your children. Explain to them that they own the shares and have them watch the price over and how their shares perform over time.

Children love to call something their own, particularly if they have shares that are doing well.

What about everyday issues surrounding money and our children, for example how much do you give a child for school? Personally, I don’t believe in giving young children, i.e.; kindergarten aged children money, because they really do not understand the value of money. They're inclined to loose it and just expect it.

But it is a good idea to give them pocket money every week. My younger son learnt his maths through counting his pocket money.

As for older and high school kids, this is relative to their needs. Just help your child to understand that with money comes some sort of payback; like doing chores around the house to earn their money. It’s important they learn that they will have to work for their money when they are older and not expect hand-outs.


  1. Get into the habit of talking to your children about money, the earlier the better.
  2. Involve your children in some of your money making decision, of course this should be appropriate to their age.
  3. Teach children to shop around for the item they are after. My son will search on Google and look at which store is offering the best price for the item he is after
  4. Pocket money is good. But help children to understand the difference between saving and spending their money.
  5. Encourage your child/children to save. For example if they save half the money for the item they are after, you will contribute the other half.
  6. Children get a kick out of having their own money. Start by opening a bank account in their name and have them put money into it. This will help them to understand the basic principles of savings.

Emily Chantiri is the author of two successful personal finance books. "The Money Club" and "Financially Fit For Life". You'll find more information about children and money in Financially Fit For Life (both published by Random House Australia. Emily's third book "The Savvy Girl's Money Book" is published by Murdoch Publications.