Teaching Kids About Money: How to Raise Financially Confident Children

By Molly Benjamin, Founder of Ladies Finance Club

Listen to the full podcast here.

If you’re wondering how to raise money-savvy kids, you’re not alone. In this episode of the Get Rich podcast, I chat with Anna Kresina, financial educator and author of Kids Ain’t Cheap, about how to teach children smart money habits early. Whether you're a parent, aunt, uncle, or someone who just wants to pass on good money vibes to the next generation, this episode is packed with practical financial education tips.

Why Talking About Money With Kids Matters

One of the biggest mistakes parents make? Not talking about money at all. According to Anna, kids form core beliefs about saving, budgeting, and spending by the age of seven. That’s why introducing financial literacy early, before they get their first pocket money is key.

Start with basics: explain how you work to earn money and why some purchases are priorities over others. Swap phrases like "We can’t afford that" for "That’s not our priority right now." It’s about empowering kids to see money as a tool, not a stressor.

The Best Age to Start Teaching Kids About Money

You can start introducing money concepts as early as age three or four. Young kids can grasp simple ideas like "work = money = purchases." By age seven, they’re ready for bigger lessons like saving and delayed gratification. Incorporating money lessons into everyday parenting moments like grocery shopping or birthday gift decisions helps normalise the conversation.

Budgeting for Kids: Piggy Banks and Pocket Money

The popular “three-jar method” for saving, spending, and giving is a fantastic visual tool for young kids. Anna recommends adding a fourth jar for investing to help them understand long-term money growth. This method teaches kids how to budget and builds essential saving habits.

Pocket money can be a great learning tool, but should it be tied to chores? Anna says chores should be part of being in a family. Instead, consider offering money for extra tasks or milestones. Just be mindful not to unconsciously reinforce gender pay gaps by valuing some chores more than others.

Teaching Kids About Investing and Compound Interest

Investing might sound like a grown-up concept, but even young kids can understand the idea of their money making money. For example, explain that owning shares in McDonald’s means every time someone buys a burger, the company earns money and so do they.

Show them how dividends work, and if they’re older (teens especially), introduce them to ETFs and even their superannuation if they’ve started a job. Visual tools like compound interest calculators can bring these lessons to life.

Handling Credit and Debt: Start the Conversation Early

Kids and teens are growing up in a world of tap-and-go, buy-now-pay-later, and online shopping. Teaching them about credit and debt early is more important than ever.

Anna recommends explaining how credit works, what interest is, and why it’s critical to pay off balances in full. Show them how long it takes to pay off debt if you only make minimum repayments, and why living within your means is a form of financial freedom.

Real-Life Money Lessons: Tips for Financially Savvy Parenting

• Holiday Hack: Give kids a set amount of “holiday money” in Monopoly bills. Once they’ve spent it, that’s it. It stops the endless “Can I have that?” requests.
• Fiver Parties: Instead of gifts, guests bring $5 for the birthday child. The child then decides how to spend or save the total amount.
• Teen Budgeting: Give older kids control over a small family budget, like holiday snacks or groceries. Let them decide how to allocate it and learn from the results.
• Learning Through Mistakes: If they spend all their savings on lollies and miss out on that Lego set, good. Better they learn these lessons young.

Raising Kids With Strong Financial Literacy

Whether it’s explaining how taxes work, discussing superannuation, or helping them understand the true cost of buy-now-pay-later schemes, your guidance can help shape their long-term relationship with money.

By modelling good behaviours, being transparent with your own spending and saving, and letting them make (safe) mistakes, you're setting them up for success.

Financial literacy is one of the best gifts you can give a child. And it starts with open, ongoing conversations about budgeting, saving, investing, credit, and smart spending.

Want More Help Raising Financially Confident Kids?

Grab Anna Kresina book Kids Ain’t Cheap and follow her on Instagram. And if you’re ready to start investing for your child, check out our episode “5 Ways to Invest for Your Kids and Avoid the Tax Traps.”

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