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Six simple money lessons

A child’s understanding of money and ability to grasp financial concepts increases with age. We’ve listed six key lessons below to help you with teaching your child, and we’ve also provided suggestions to help you explain these lessons as your child matures.

Read more ideas for parents.

Age of your child

Money lessons for your child

7 years and under (pre-school & infants school)

8 -12 years (through primary school and early high school)

13 years and over (high school)

The value of money

Teach your child the value of money in terms of material goods. For example, at the supermarket explain how the shopping costs money.

As your child gets older, you can explain the importance of money for everyday life (house, car, school, holidays) and as security for the future.

Money isn’t all about value in terms of goods and services. When your child reaches this age, you can start discussing concepts of value in terms of investment and superannuation.

How money is earned by going to work

We can teach that work may involve considerable mental or physical effort.

A career choice may be appealing or rewarding, irrespective of how much is earned.

Explore the relationship between time and money, and how different careers demand different rates of pay.

Saving money

Saving for short-term purchase goals. Money should be "saved" in a visible location (e.g. jar or money box), so your child can see how their savings are growing.

Saving for longer term purchasing goals. You can help develop a savings plan in order to make a purchase or simply to reach a set target.

Rather than saving for a specific purchase, we can encourage a routine deduction from wages or pocket money.

Spending money

The most important lesson about spending is that once money is spent, it is gone for good.

The most important lesson about spending is that once money is spent, it is gone for good.

Prioritising expenditure within a finite budget. This is a good opportunity to plan for future expenses such as holiday spending or buying Christmas presents.

Borrowing money

What is borrowed must be paid back. Use examples of borrowing toys from friends and how they must be returned.

You may wish to introduce concepts of interest and calculations of time to repay loans. The maths your child is learning at school could be put into practice.

Learning the difference between depreciating assets (e.g. car) and appreciating assets (e.g. home) is a great way to help your child.

Investing money

Explain the concept of using money to create money. For example, by putting money into a savings account, you can earn interest.

Discuss share ownership and possibly purchase shares in a company. You can then track share performance together.

Take this opportunity to talk about the concept of managed funds and how people 'pool' their money together to maximise returns. This could also be a good time to discuss risk when investing.