Financial Education

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How to Talk Money With Children - Part 2

How to Talk Money With Children - Part 2

(Reading time: 3 - 5 minutes)

Over the next few months we will be providing some helpful tips on talking money with the 3 age groups - Children 4-8, Tweens 9-12 and Teens 13-18.

Part 2: Children (9-12)

Australian parents have concerns about how their children will navigate their financial future. More than two in five (45%) are concerned their children will lack the skills they need tobe financially successful once they become independent.
FPA Share the Dream Report 2018

How can I teach my tween to make good choices with their pocket money?

Clinical child psychologist and mother of three, Emma Spencer is often asked how much pocket money children get. There’s no one-size-fits-all answer, so she shares how pocket money works in her home.



Never just give your kids money. That is my number one rule. 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. I don’t encourage parents to just give out money. Instead, help your child understand that with work they can earn their own money.


Pocket money is “earned” money from parents, it’s not an “allowance”. In my mind, there is no difference between a tween’s pocket money and a teen’s income from a part-time job. Every family is different. In our household we have 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.

In our rampant consumer culture, every toy has a use by date and every piece of tech built-in obsolescence, so you get conditioned to upgrade. A budget will help you have this conversation — try try talking about it over dinner.


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.


Don’t share everything. I think it’s important that tweens be aware of the family budget. Let them be aware of household spending and the decisions being made, but don’t worry them with topics that create stress.

Tweens are already going through a very sensitive developmental stage with lots of pressure and changes. The last thing that they need is to worry about a possibly, negative family financial situation.


From piggy bank to online bank account

There will come a time in your child’s life when they’re ready to transition from the piggy bank to something more reflective of the way adults use money. The team at Banqer explains how to make invisible money tangible.


Show how ‘invisible’ money is real money. For example: If you’re paying $80 for an item, take your kids to the ATM, get the money out, and get them to watch you hand it over the counter. This will help them understand what $80 really means.


Include tweens in basic purchasing decisions. At the supermarket, talk about why you’re purchasing one product over another. At check out, let them use your paywave card. Then next time, lift the plastic mystique and let them pay in cash, so they develop an association between the card and physical money.


When you feel they’re ready, give your child a prepaid debit card designed for children under 18. It’s like a regular debit card, except you have ultimate control. You can transfer money, set an allowance, and receive notifications when they transact. You can also lock and unlock the card at any time.

Teach your children about spending with a debit card by asking them to imagine paying cash first.


Share your household incomings and outgoings to help your child understand adult financial responsibility. Ask them to help you create spreadsheet showing all of your household expenses, including those relating to the children, so they can get a sense of how money works in everyday life.


If you feel comfortable, add your household income to the spreadsheet and get your kids to do the maths to see how much is left over each month. No doubt it will be a big eye opener, not to mention it will give them an appreciation for the work you do.


Next month we will be covering the final age group Teens ages 13-18.

Download the eBook - How to Talk Money with Children PDF

Download the full report on research into raising the Invisible Money Generation - FPA Share the Dream PDF


Need some help on how to guide your teens be money wise?

Why not book an appointment or give us a call and arrange to speak with one of our advisors, contact us on 02 9328 0876.

Article by - FPA and Money & Life |

General Disclaimer: This article contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information. Please seek personal financial advice prior to acting on this information.


Photo by Annie Spratt on Unsplash