Making it count:
Homeschooling your kids about money

Making it count:  Homeschooling your kids about money

So obviously we’re all spending a lot of time at home. Xinja would like to help make this time well spent, by offering a blog series – ‘making it count’ – to help boost your basic financial literacy & get money fit during iso. Today we’re looking at how to get your kids money smart, given you’ve got them at home!

How good are we at teaching our children about finance?

Recently parenting got a lot harder, now that you also have to take the role of teacher. As parents, you have to tackle almost any topic, no matter how tough…but the money conversation? How are we doing?

Financial literacy is now globally recognised as an essential skill. However, according to an OECD study, despite testing well for financial literacy, Australian youths are making poor money decisions and are not financially savvy.

Money Advice Service’s research has shown that while parents teach their kids about finance differently, it is clear that parental actions have a greater impact on our kid’s financial capability than a financial education in school.

So why not make the most of the lockdown time and teach your child(ren) something that has lifelong benefits (ie: good money habits and mindsets)? Here’s a quick guide to help build a good relationship with money early.

What determines children and young people’s financial capability?

According to Money Advice Service research, while financial capability is made of several elements, ability (children’s financial knowledge and skills), connection (children’s engagement with money and their access to financial services or products), and mindset (children’s values and attitudes towards money) are the most important factors.

Research from Cambridge University on Habit Formation and Learning in Young Children confirmed that kids’ money habits can be set by the age of 7, highlighting the importance of fostering those habits young, and why we should not underestimate the power of our own habits (be they good or bad!). We will also cover some bad financial habits that parents might have unintentionally passed on to their children…

Also, it’s never a bad time to walk the walk, teach girls and boys about valuable money mindsets like financial equality and help them practice them. (See how #XinjaWomen unpack the topic of gender financial equality).

101 on teaching younger children good money habits


  1. Start early with the basics
    Remember the magic number 7? Start BEFORE then. As soon as your kids learn to count, we can teach them the money basics. According to Forbes, showing kids how money works is a good first step. It can be as simple as explaining to them where the money comes from and where it goes, the next time you go (online) shopping.You could also set real life challenges. Challenge your kids to budget for the family’s next grocery shop, for example.
  2. Teach them about work ethics with a pocket money system
    Letting your kids earn some money and budget it isn’t a bad idea. They’ll also learn that “ask and you shall receive” isn’t how it works. If you give your child a regular allowance, encourage them to make it last longer. When the kids are old enough to make decisions for themselves, introduce a commission system so that they could not only learn to live within a budget, but also understand that money is earned.
  3. Set up saving goalsAs your kids’ earliest interactions with money will likely be buying/spending, you’ll need to instill the habit of saving by showing them the virtues of delayed gratification. By teaching your kids saving you are not only teaching them about money, but also goal-setting and planning, which are all essential skills.A piggy bank is a good start, but it doesn’t give kids the visuals. Get them a clear jar instead. Talk it through with them, and make a big deal about it growing! And for young children, it’s okay if the goal is short-term (choose between a toy or a book? Decision time!)However, with so many things being instantly available thru an online purchase paid for with an invisible credit card, it’s harder for them to understand how much it costs – so as , Mario Hasanakos, the co-founder of Spriggy, advises, “set up a savings goal so that they can see what it actually takes to get there”.
  4. Encourage giving
    According to Business Insider, a new study suggests that although being sensible about money is very important, generosity is another financial lesson parents should be sharing with kids. Allow them to pick a charity or a cause that’s relevant, because children will eventually see that giving doesn’t only affect the people they give to, but also the givers themselves.
  5. Lead by example
    Because little eyes are watching you….the more they see you spending casually and often, the more they will think that’s ok.

How to teach teenagers about money

So here’s the hard part……just when they’re getting to the stage when they really need to ‘get money’, they’re probably least receptive to anything you say……but persevere! This is the moment to step up the complexity of what you’re talking about and the responsibility they have to take and model money management.

According to CNBC, there are a few things you can teach your teenage kids to help them be responsible for their money and make money relatable, such as:

  • Teach them how to earn money. Give them a few ideas…and some less subtle hints about how if they want something, they’re going to need to get off their proverbial and make it happen.
  • Understand wants vs. needs…so they can learn to delay their purchases. As Chantel Boneau, Wealth Management Advisor of Northwestern Mutual says, “You want to teach them how to make good and bad choices…with the amount of resources they have.” They don’t “need” that 3rd pair of designer sneakers, or that 14th lipstick….
  • Set a shopping budget. Duh!
  • Communicate openly. Share your experience with your kids, including where you screwed up. Check in regularly with them to see if they are on track with their saving and spending, and have conversations about their goals and progress.

There are lots of ways to encourage money management in teenagers like setting up a savings account to start saving for something further in the future and bigger, like a trip somewhere, or a bike or car. And how about getting them to pay their own mobile bill? That will focus their minds 🙂

Forbes also stressed the importance of teaching kids (and people of all ages!) the danger of credit cards. Introduce the concepts of good debt vs bad debt and help them understand the differences, so that they don’t become victims of the bad ones.

What NOT to do when teaching kids about money…

According to MarketWatch, a recent study found that “parents with bad money habits are likely to pass them onto their kids”. Mozo has a handy checklist on how to avoid accidentally teaching your kids bad financial habits, like instant gratification, expecting money for nothing, relying on credit, and fearing debt (too much that is…..)

Learning games and activities

Who says learning about money has to be dull?!

Whilst some of these might just get eye-rolling from the teens, younger kids might like the “make your kid a money genius: the activity kit” to learn good financial habits through role play, this holiday-themed pie activity for budgeting or some of these cute games and videos by ABC Education. These Sharemarket Games offered by ASX to help them understand investment and the economy are a bit more sophisticated for the older ones, and you can also order the Rich Dad, Poor Dad CashFlow Game online. Speaking of which, Rich Dad, Poor Dad (book) is an oldy but a goody about money mindset, good to read for children of any age (including those up to 50!)

So enjoy having the little darlings with you, and see if you can release them back out into the world with a sharpened sense of how money works. Good luck!!

If you’ve got suggestions of finance 101s you’d like us to cover off in this series, do head to the forum to let us know.


The above is general advice only and obviously Xinja has not considered your or your children’s personal financial situation in preparing this information.


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