How to talk to your kids about money (when you're still figuring it out yourself)

Talking about money can help us make better money decisions, avoid mistakes others have made and demystify the subject of personal finance. Simply having a conversation every now and then can make a big difference - especially with our children. 

After all, most kids learn almost everything they know about money from their parents. In fact, having a deliberate, honest chat with your little one could help keep them out of trouble (and debt), instilling good habits that will remain with them for life. 

Normalise money talk

Dan Russell is a fellow who knows better than most how important it is to talk to our children about money. He’s the head of education, strategy and research for Square One, a digital platform that teaches kids practical lessons about how money works in 2022:

“As parents, we need to be having regular conversations with our kids about money, from an early age. We can't guarantee the future, and we can't rely on schools to teach everything, so we need to create a base of learning about money at home,” Dan said. 

He adds that ultimately talking about money with our kids from a young age should:

• Normalise money talk: ensuring that money talk is normal, not scary or taboo and empowers your kids to ask questions and seek help.
• Model how our kids should talk about money: making sure that money talk is rational, grown up and planned. 
• Make talking about money purposeful: you’ve decided what you want your kid to learn from you and how you’re going to teach them. 

Now that we know why money talk is so important, where should parents and guardians start? 

Let’s talk about money, baby

Dan reckons that the best time to start talking about money is early - kids can grasp basic ideas at 3-5 years old and they soak up everything you teach them at this age. 

To start it’s a good idea to teach your kids the value of money, that it’s earned by working and that if you randomly buy stuff you could run out (and not be able to pay for important stuff). 

Then, talk about your bills, expenses and income and involve your little ones in all the conversations your family has about this stuff. Explain what you’re doing when you’re paying your credit card off and talk about the reasoning behind spending decisions when you’re at the supermarket. 

Clarissa Hirst (Riss), our Head of Content, Communications & Marketing, says her dad did all of the above for her when she got her first job:

“He was patient but kept emphasising how important it was, and helped set up an Excel spreadsheet with all the formulas and things to make it really easy for me.”

Riss' spreadsheet helped her see how savings could help her achieve her goals like travelling or buying a house. She says his money philosophy (and his spreadsheet) has stuck with her throughout her life:

“The emphasis wasn’t on making as much money as possible, it was about how could I use what I was earning and saving to get where I wanted to go, and what did I need to do in order to get there.”

“I have that in the back of my mind even now that I’m in my thirties and my dad is no longer with us. That and I continue to use the same Excel spreadsheet he set me up with when I was 15 – though it’s now moved to Google Sheets and been modernised quite a bit!”

Learn by doing

Next Dan says that once your kids are old enough you could start teaching them practical lessons about money:

“Get them involved in chores and jobs, take them shopping at the supermarket, look at comparing the prices of new clothes or school supplies, or deciding about family savings for a trip or fun experience.

Anything where you can talk about money in a real way that shows how you think about money and how you make decisions about money.”

The Square One app can be a great way to start teaching those practical lessons. It’s an all digital money app for kids that’s linked to a card, enabling you to pay your kids automatically for chores (breakfast in bed perhaps) and encourage them to reach their savings goals. Their account is linked to your parent account, from where you can see real spend notifications, set spend limits, and allow or disallow online use. 

Bring the kids along with you

Some parents worry that they don’t know enough about money to set their kids up, and that’s fair enough! It’s hard enough to learn about money, let alone teach someone else. 

Frances Cook, BusinessDesk Investments Editor and author and host of Cooking the Books podcast, says your kids can learn with you:

“Feel free to educate yourself and bring your kid along with you. Read books and online resources and talk to your kid about what you’ve learned. This teaches your kids that they can talk openly about money without having to be an expert.”

In episode #19 of our Money and You video series, she adds that, it’s always good to get your little ones started early and introduce them to online platforms where they can grow their money by investing:

“Where if they go and get a part-time job, then you can say what are your goals? Would you like to go travelling or start a business? OK, how can we invest your money to reach those goals and learn about the share market.”

Linking conversations about money to practical goals like travelling or just buying a video game can be a great way to keep it interesting for your little ones. And ultimately that’s the name of the game - the more fun your kids have learning about money, the better they’ll be with money.