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How to teach young children the value of money

How to teach young children the value of money

Studies show that one’s attitude to money is often formed as a child, influenced by that of his or her parents. Therefore, role modelling positive and smart money behaviours is the best thing you can do to financially empower your kids. This involves being aware of what you do with your money (I like to call it being financially fit) and also teaching your kids the value of money.

Talking about money with your children and basic lessons in economics can begin when they are in preschool.

Good first discussions might centre on helping children understand that you have to go to work to contribute to the household, and explaining household expenses.

Teaching children the value of money in this day and age presents unique challenges. So much value transfer is carried out virtually rather than with physical cash, and as parents we must work harder to help children become financially literate. For younger children, it helps to make money more tangible.

Here are some of the things I do with my five year old son to help teach him the value of money:


At the shops, I let him pay using both my credit card and cash. This teaches him that when you want goods or services, you need to pay for them. Plus, my son learns basic mathematics (receiving change from cash).


We have implemented a piggy bank system so my son can learn the benefits of saving. He is sometimes rewarded for good behaviour etc, with points or money. He has learnt to save up his points to buy something that is special to him.

From this he learns not only the art of saving, but also delayed gratification. This system also teaches him that items or gifts are not always given to you. To get what you want, you must work for or earn it!


I encourage my son to also give to those in need and practice gratitude. Some actions we have tried include placing money in the charity box each week, donating a portion of his birthday money towards a charity of his choice, getting him to choose some clothes/toys to give away, or openly speaking to him about gratitude (this last one is really important!).

As my son and daughter grow up, I will aim to make them increasingly responsible for money, and introduce earning and budgeting. The way we practice these steps may differ going forward, but the principles will remain the same.

What ways do you empower your kids financially? We’d love to hear from you! Email us at hello@circlein.com.au.

Written by Irit Harris. Irit is founder of F-Empowered, a platform to empower women to make decisions about how to manage their money.

Aside from being an infinite learner (over ten years in banking, MBA, Diploma of Finance, accreditation to give general advice on banking and insurance products), Irit is a mum to two beautiful kids, wife to the incredibly supportive Josh, and lover of travel, yoga and jogging.

Check out F-Empowered and follow her on Facebook and Instagram.


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