With tap-and-go payments becoming the norm, kids today aren’t seeing as much physical cash change hands. And when they're not watching notes and coins being exchanged, it’s naturally a bit trickier to help them understand what money’s actually worth. However, it's not just about the lack of physical money – the financial world our kids are growing up in is far more complex than the one we knew. That's why financial literacy matters more than ever to help kids build the foundations for a stable financial future.
“Today’s youth need sophisticated financial capability to effectively manage financial complexity earlier generations never encountered, such as digital financial products, buy now pay later schemes, and enticing social media shopping channels,” says Katrina Samios, CEO of the Financial Basics Foundation.
ASIC’s Young people and money survey found that young people who grow up in households where they have learning experiences related to money, including family discussions about financial matters, feel more confident about their financial skills, decision making and future financial prospects than young people whose families do not have these conversations.
Rick Molineux, former primary school teacher, now Head of Global Education Success Tutoring recommends teaching financial literacy through experience. Getting involved with your kids in simple, practical, fun activities that involve physical money can be a great way to do this.
Primary School Money Skills: Hands‑on Financial Literacy Activities
Physical experiences matter for younger learners, says Rick. “Start with tangible materials to help build financial foundations before moving to abstract digital representations.”
Ana Kresina, a financial educator and author of book ‘Kids Ain't Cheap’, says, “Kids can start playing with real or play money, such as coins and notes they can count, which can reinforce numeracy skills and is great for kids to understand that physical money exists.”
Play Shop: Teach the Value of Money
Playing shops is a great opportunity to talk about how much things cost and why. “[This can] teach basic finance including the value of money. There’s an emotional connection when seeing cash leave your hands,” says Ana.
A shopping exercise will organically involve basic numeracy skills when working out how much change to receive or give, along with important reasoning skills, says Rick. “A child might be able to calculate the cost of three items, but the real skill is when they can think through whether buying those three things is the right choice, or whether they should get two items and save the rest for something they want more.”
Similarly, Ana says there’s a misconception that you need to be great at maths to be good at finances, but that’s not always the case. “Finances are more behavioural, such as being aware of how you're saving and spending.”
What to Try
- Kadink Wooden Cash Register
- Kadink Australian Play Coins 96 Pack
- Kadink Australian Play Notes 50 Pack
- Orchard Toys Pop to the Shops Game
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First Budget: Pocket Money Tracking and Spending
Getting kids involved in some of the family financial decisions is a great way to introduce them to budgeting, says Rick. For example, you might say, “We have $30. If we buy the expensive cereal, we'll skip the treats. What matters more?” (Odds are they’ll pick the treats!)
Set kids up with a notebook to track how much they spend and on what, and how much they have left. As kids note down their purchases, they’ll see the effects of their spending. Getting them to create a list of the things they want and comparing it to how much money they have will help them to understand budgeting and financial priorities.
Katrina says saving for a goal or sticking to a budget also strengthens self-control and patience, which are key skills for managing things such as money, bills and spending in future.
What to Try
Savings Goals for Kids: Try the Save, Spend, Give Bucket Method
Ana recommends teaching about allowances or even creating ways they can make money. This can open a conversation about how money is earned, and why. “I have my kids recycle cans, so they understand, ‘If I do some work, collecting cans, then go to the recycling place and put them in, I will get money.”
“Understand what motivates your child [to earn] money, then guide them through the four foundations of how they can use that money: saving, spending, giving and investing,” says Ana.
It can help to use physical buckets, such as jars, bowls or piggy banks, one each for ‘save’, ‘spend’ and ‘give’. Rick says the key is making it visible – whether physical or digital, kids need to see where their money goes and how it grows.
Katrina recommends supporting your child to set a savings goal and then creating a plan to achieve it. “This process delivers practice in impulse control and delaying gratification. You’re also supporting your child to develop an early positive savings habit and setting them up to achieve their financial goals.”
What to Try
- Born 40mL Sample Jar and Lid 2 Pack
- Kadink My Reward and Responsibility Chart
- Kadink Sorting Bowls 6 Pack
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Early High School Financial Literacy: Spending, Saving and Investing
Katrina says early high school is the ideal time to introduce real-world scenarios and independent thinking, especially suited to their life stage, such as getting their first job.
Managing Money for Teens: Set and Stick to a Budget
Ana suggests giving your teen a monthly budget to manage, which helps them make better financial decisions. “They're going to make very different decisions about their purchases versus knowing their parents will pay.”
Physical tools help children understand money by making it visible and concrete, says Katrina, which supports deeper understanding. “When children write out a SMART [specific, measurable, achievable, relevant and time-bound] savings goal or create a physical budget for themselves, they are actively thinking about what they are doing rather than watching money move on the screen of an app. This helps them understand how choices affect outcomes and why money runs out or grows.”
What to Try
Smarter Spending: Teach Teens to Compare Prices
Ana also suggests the exercise of savvy deal-finding: kids search for and write a list of the different insurers or internet providers to find a cheaper plan, while they get to save and keep the difference – that’s some serious motivation to start researching!
Katrina says this teaches that saving money makes shopping around worth the effort and there’s often a lower price if you look long and hard enough.
What to Try
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Saving and Investing: Understanding Compound Interest
Paying yourself first by saving a percentage of income is a proven approach to achieving your financial goals. “Older children can start putting away a percentage of their money and work out what that will look like in a year, and then five years’ time,” says Ana.
Talk to your child about how investing money can help to improve their finances. “Showing kids a compound interest calculator in terms of how their money can make money can be really inspiring for them,” says Ana.
