Wealth Management

Building financial resilience: How to educate your child on good financial behaviours

30 November 2021
5 min read

1 December 2021

Sound financial decision-making is strongly linked with improved financial wellbeing and greater participation in economic life.

In a time where the future has perhaps never looked so uncertain - it’s more important than ever that we’re equipping the next generation with the tools they need to be financially resilient.

Yet troubling data from Findex’s ‘Young Money’ report this year revealed that half of Generation Z don’t have a handle on their finances.

This coming-of-age COVID generation is struggling with their day-to-day finances, as the survey of 16-24 year olds showed one in four never or rarely set a budget and only a third manage their finances by calculating their monthly in-goings or outgoings.

Developing sound financial behaviours is an increasingly important life skill and something that can be fostered in children from a young age, to help prepare them for adulthood.

In fact, we know that ‘mum and dad’ remain the go-to for financial advice for young people so as a parent, being prepared for this is imperative.

Whatever the age of your children, below are simple steps and strategies you can use to start educating your child so they can feel confident in managing their own budget and finances as the grow:

1. Set up a piggy bank (Ages 1-2)

This is a simple idea that can be implemented at a very young age as part of a fun game. Find a piggy bank or coin box and help them collect coins to insert themselves, it will help with their fine motor skills and teach them that the piggy bank is something special to be cared for.

2. Take them shopping (Ages 3-4)

Once the piggy bank is full, teach them how to spend some of it, by taking some money out to purchase a toy or giving it to someone who needs it, make sure they are the protagonist in the transaction - so they understand the logic in saving to spend later or help others.

3. Give them an allowance (Ages 5-6)

Make them work for their money just like parents do and draw comparisons. They can start by completing chores around the house like making their bed, picking up laundry, feeding pets and helping to take the rubbish out. Each week they complete the chores they get coins to add to their piggy bank.

4. Start saving (Ages 7-8)

At this age children may desire more expensive toys or technology and perhaps receive regular gifts in the form of cash from relatives. Keep adding to their piggy bank and encourage them to save for what they want. You could even perhaps promise to match their savings to help keep them motivated.

5. Start a business (Ages 9-10)

Some kids love the idea of working to make money, either by making things to sell or providing a service in their community; encourage this behaviour. You might even offer start-up capital to get their idea off the ground. Any money that is made can be split into savings and capital repayments and you could even introduce the concept of taxes.

6. Goals-based budgeting (Ages 11-13)

As kids mature, their appetite for expensive items increases, this is a great opportunity to focus them on working towards those wants. Help them write out a plan on what they have saved, what to spend and what they should think about donating.

7. Start earning money (Ages 14-15)

At this age they may already be showing skills they can use over the holidays, dog-walking, gardening, cooking, etc. Support their skills and how they can earn money for it, this will keep them on track to their goals-based savings.

8. Pre-adulthood (Ages 16-18)

This is when all the good habits you’ve started building can be put into practice. At this age, you can take them to the bank to open their first bank account with their savings. Give them the responsibility of using their debit card and take the opportunity to explain loans, taxes and the importance of living within their means.

There is no rule book for teaching your kids about finances, but if you can start small, encouraging good behaviours from a young age then your children will be able to reap the rewards as they reach adulthood with financial confidence.

Young Money is a ten-episode podcast produced by the Findex Community Fund which helps young Australians with day-to-day financial skills. Covering topics such as basic financial literacy, buy-now pay-later, budgeting, uni loans and much more, Young Money is available to listen and subscribe to on your favourite streaming platform.

For further information or advice,submit this formto receive a call back from the FindexWealth Managementteam orsearch for an adviserin your area.

This article was originally published on 3 November 2021 for Stay-at-Home Mum.


While all reasonable care is taken in the preparation of this article, to the extent allowed by legislation Findex Group Ltd accept no liability whatsoever for reliance on it. All opinions, conclusions, forecasts or recommendations are reasonably held at the time of compilation but are subject to change without notice. Findex Group Ltd assumes no obligation to update this content after it has been issued. The information contained is of a general nature only and does not take into account your objectives, financial situation or needs. You should consider whether the information is suitable for you and your personal circumstances. You should seek professional advice and speak to a qualified adviser before acting on any material.

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30 November 2021