Piggy bank basics - teaching your kids all about money

Source: moneysmart.gov.au

Piggy bank basics

In a rapidly changing world, teaching your children about managing money has never been more important. Here we explain how to raise money smart kids.

  • Why teaching financial skills is important
  • When should you talk to your kids about money?
  • MoneySmart Teaching in schools
  • Which money concepts to teach for different ages
  • Practical ways to raise money smart kids


If kids develop good financial skills from an early age they'll be ready for the financial challenges of adulthood.

Giving your kids a good foundation and teaching them about money matters is critical for their personal development. Showing children the basics such as how to budget, spend and save will establish good money habits for life.

David and Libby Koch share their tips on teaching kids about budgeting and developing sound money skills. They also talk about MoneySmart's budget planner and TrackMySpend app.  This video was developed in partnership with the Koch family and Father Chris Riley's Youth Off The Streets.


In a time of credit cards, internet banking and online shopping, children don't often see people buying products with physical money like notes and coins.

Not seeing money exchanged for purchases makes it harder for kids to get their heads around what things cost. They might see this invisible money as an abstract and unlimited resource rather than real money coming in and out of their family's bank accounts.

Talk to your kids about money often to help them make this invisible money real.

When should you talk to your kids about money?

Teaching younger kids the value of money through real life situations and examples will help them understand where money comes from and how it is earned. Here are a few examples of how you could approach this with your kids.


The ATM is a great place to start teaching kids about money. You could explain to your child that the ATM holds the money you have made by working hard and saving. It is not just a hole in the wall where money comes out.

When you take money out of the ATM it is taken from your bank account and you'll have less in your account to spend later.


When buying items at the supermarket, you can explain to your kids how items are priced and that you can get cheaper or more expensive versions of the same product. This is also an opportunity to discuss how you can shop around for the best price.

You could get them to compare prices for you and pick the cheapest one. If they want a particular brand then explain the price difference to them.


If you receive bills in the mail or online, this can be an opportunity to explain that electricity or your internet connection costs money. You could explain that to pay a $150 power bill it took you so many days at work to earn the money. This will help create a connection between time spent at work and money, as well as the fact that electricity and the internet cost your family money. It might also make them think twice about leaving lights and appliances on.


Involving your kids in discussions about your family budget is another way you can talk to your children about money. This helps give them the big picture about costs and spending.

By explaining how much money your family has to spend every week and how this money is spent your kids will better understand the costs of family life and how much can be saved for other things.

Help your kids put together their own budget.


Pocket money can help children better understand the value of money. See our giving kids pocket money webpage for more details.

MoneySmart Teaching in schools

Kids are learning about money in school. This can be happening in a lot of ways, whether through school fundraising activities, as part of a kitchen garden project or using the school canteen.

Schools and teachers are ideally placed to help young Australians develop the knowledge, skills, attitudes and behaviours needed to meet the challenges of the twenty-first century.

ASIC's MoneySmart Teaching program builds the consumer and financial literacy capabilities of young Australians and helps educators, families and the community teach young people about money.

Find out why your kids school should become a MoneySmart School and take a look at some schools who have successfully integrated consumer and financial literacy programs in their school curriculum.


As your children grow up, they will have different experiences and require a better understanding of money. Here are some ideas about the sorts of things your children will need to know at different ages.


Let your kids pay for small expenses with their pocket or birthday money. This will help them work out how far their money will go.



  • You need money to buy things
  • Money includes notes and coins that have different values
  • You earn money by going to work
  • There is a difference between things you need and things you want


  • Comparing prices and shopping around before you buy something is a good habit to get into
  • Be careful when shopping online and never share your personal information online
  • You need to be patient when saving up and you can make choices about how to spend your money


  • It is better to use cash than credit
  • Credit is money that you borrow and have to pay back with interest
  • It is good to have savings in case of a money emergency
  • If you work a part-time job, you need to check your pay slip to see that you are being paid the correct amount and if you are paying tax
  • Keep track of mobile phone data and expenses to make sure you don't run out of credit or get stuck with a large bill
  • Bank accounts can help you to track and keep your money. See our under 25s section for videos and tips about managing money for young people
  • Doing a budget helps you work out how you should spend your money

Practical ways to raise money smart kids

When children get to an age where they are earning pocket money or working a part-time job, they will start to spend their own money.

Here are some things you may want to do with your children to help develop their financial savvy and independence:

  • Shopping lists - Ask your kids to help you compile a shopping list of needed items for home.
  • Research purchases - Work with your children to research online or shop around to find the best price for an item they want.
  • Set goals - Help your kids to set a goal and track their savings through a chart (for example, they could colour in coins on a chart to show their progress). For older children and teenagers set up a bank account and help track saving and spending.
  • Plan an event - Involve your children in planning and budgeting for special occasions such as outings or birthdays. If you are going on an outing work through all the costs including transport and food as well as any admission prices.
  • Shop safe online - Make sure your kids are safe when online shopping and know how to spot an online scam. If it sounds too good to be true, it probably is.
  • Needs vs wants - Help your kids avoid spontaneous purchases and set goals to think about whether they want an item before parting with their money. Discuss the difference between needs and wants and encourage your children to think about this before spending.
  • Check mobile use - When your child receives their first mobile phone, show them how to check and minimise data usage, set boundaries on use and involve them in selecting pre-paid or a plan.
  • Criticise ads - Get your children to review advertising on TV and in catalogues with you. Ask them what the ads are trying to sell, how they try to sell it to you and if they need the product they are advertising.


MoneySmart Teaching have digital activities to help your teens learn more about how to approach shopping for a mobile.


Teaching kids about money is an important skill. Money skills should be developed from an early age and fostered into young adulthood. The more financially savvy your children are the better spending decisions they will make throughout their lives.