Bringing up children in our incredibly fast-changing world, particularly in times when household budgets are tighter than ever, it’s never been a more important time to start conversations with your kids about money.  

Teaching your kids simple concepts around earning and saving money, may very well be one of the greatest gifts you can give them for their future. 

But what is money to our kids? Do kids even know what our coins and notes look like these days? What cash looks like itself has evolved. We lost our one and two-cent coins, we round up, we round down, it’s near impossible to find a bank branch you can walk into, and you need a treasure map to find an ATM where you’ll be charged a small fortune to take out your own cash. 

Whilst many parents grew up in an era of taking a gold coin to school to be placed into your dollarmite account and spent their weekends doing chores for a shiny coin or two, today kids are digitally savvy and so entering the world of cards versus cash will be a much easier transition. 

While most would agree, that it’s harder to spend cash than the ease and convenience of swiping away, we are racing towards a cashless society with Macquarie Bank recently announcing that in 2024 they will be phasing out cash and cheques altogether. 

The Reserve Bank of Australia indicated that the majority of financial transactions are electronic payments, so we would expect more of these announcements from other banks in time. Similarly, the government’s announcement that our cheque system will be winding down over the next few years, and ending by 2030. 

So, whilst poor grandma and grandpa might find it harder and harder to get a hold of a $10 note to place in your next birthday card, when and where do we start to teach our kids about the value of money for the years to come? 

One of the early lessons we can teach our child is what a need is versus a want. This can be tricky with a young child who might see nothing more important than that new Lego set or doll but simply using those words and talking about what is more important than something else, is a great start. 

When your children are young, simply talking about money and the cost of items, can help them start to build an understanding of spending. For example, when you’re doing your grocery shopping, talk aloud about how much a particular item costs, and then choose another because it’s on sale at a lower cost.  When they get a little older, perhaps you might feel comfortable giving them a particular amount of money to spend, and they will gain independence by walking each aisle and carefully looking at prices to ensure they can get their favorite items within budget. 

For our tweens and teens, an alternative to debit cards is prepaid cards for kids. Well-known examples include Spriggy and ZAAP. Your child can select a card design to be posted out to them and they work very similar to debit cards but they are not linked to a transaction account. Instead, money is loaded onto their card and they can only spend what is there for them. Parents and kids can easily monitor balances and spending via an app and parents have access to parental controls. Whilst these types of cards typically charge a yearly fee, it is wonderful for those times when your teen might unexpectedly need money for the bus or is a few dollars short for lunch, and within moments you can transfer a few extra dollars to their card, and get on with your day. Besides that convenience, the app allows you to set up tasks for money to be earned, teach your child how to budget and review balances and their spending. 

According to recent statistics from the ABS, it’s predicted that approximately 54% of kids aged between 15-19 are employed in Australia, so if our kids are earning, it is time to get saving but also spend. Whilst many parents like the 50/50 rule when it comes to income, whatever the percentage you decide to save and spend, is isn’t practical for kids to think that in life they will be able to save 100% of what they earn. Spending plays a vital role in understanding the value of money. 

Finally, know the importance of setting a good example and practicing what you teach. You may like to discuss and plan a family holiday you would all to take, and let your kids be part of the conversation on how much the holiday will cost and how your savings are progressing.