Teaching Kids About Money — Age-by-Age Guide

Ages 3–5: Introducing the Concept of Money

At this age, children can start learning that money is used to buy things. Use physical coins and notes to show them different values. Play shop at home where they can "buy" items using play money. Explain that you need to work to earn money and that money is limited — you cannot buy everything. Simple games like sorting coins by size and colour help build familiarity.

Ages 6–8: Saving and Goal Setting

This is the ideal age to introduce pocket money and the concept of saving. Give a small regular amount and encourage your child to divide it into three jars — one for saving, one for spending, and one for giving. Set a savings goal for a toy or treat they want. This teaches delayed gratification and the satisfaction of reaching a goal through saving. The three-jar system is recommended by the Australian Securities and Investments Commission's Moneysmart program.

Ages 9–12: Budgeting and Choices

As children get older, introduce the idea of budgeting. Give them a slightly larger amount of pocket money but require them to cover certain expenses from it — like buying their own treats or small items. Help them create a simple budget on paper that tracks money in, money out, and savings. Teach them about comparing prices and making value-based decisions. The Moneysmart website has free printable budgeting worksheets for this age group.

Ages 13–15: Earning and Banking

Teenagers can start earning money through part-time work like paper rounds, babysitting, or lawn mowing. Open a youth savings account with their own debit card to teach them about digital banking. Show them how to check their balance, track spending, and understand bank statements. Discuss the difference between needs and wants, and the cost of borrowing — including credit cards and buy now pay later services they may encounter as young adults.

Ages 16–18: Preparing for Financial Independence

Older teenagers should understand tax, superannuation, and the cost of living. Show them their first payslip and explain tax withholding and the Superannuation Guarantee. Discuss the importance of avoiding high-interest debt and building good credit. Help them create a realistic budget for when they move out of home, including rent, utilities, food, and transport. The Tax Office and Moneysmart have resources specifically designed for this age group.

Ages 3-5: Basic Concepts

Young children can learn basic money concepts through play and everyday activities. Teach them that money is used to buy things. Use a clear jar for savings so they can see money growing. Play "shop" games where they exchange play money for items. Explain that you need money to buy things at the supermarket.

At this age, the focus should be on simple concepts: money is used for purchases, saving means keeping money for later, and you need to make choices about how to spend money. Keep explanations simple and use concrete examples.

Ages 6-12: Pocket Money and Saving

This is the ideal age to introduce pocket money. Give a small regular amount and encourage the child to divide it into spending, saving, and giving jars. This teaches budgeting and delayed gratification. Encourage them to save for a specific goal or toy they want.

Involve children in simple financial decisions: comparing prices at the supermarket, choosing between different products, and understanding that some items cost more than others. Explain the difference between needs and wants.

Teenagers: Preparing for Independence

Teenagers can learn more advanced concepts. Encourage part-time work to earn their own money. Open a bank account in their name and teach them to manage it online. Introduce concepts of budgeting, earning, saving, and the basics of investing and compound interest.

Teach teenagers about: responsible credit card use, understanding mobile phone plan costs, saving for a car or other goals, and the basics of tax (how tax is deducted from wages). This prepares them for financial independence as young adults.

Frequently Asked Questions

How much pocket money should I give?
There is no set amount. Base it on what you can afford and what the pocket money is intended to cover. A common approach is $1-$2 per year of age per week, adjusted for your family circumstances.

Should I pay children for chores?
This is a personal decision. Some parents pay for chores to teach earning, while others believe chores are a family responsibility. If you pay, consider linking payment to specific jobs rather than routine household tasks.

At what age should my child get a bank account?
Most banks offer children's accounts from birth. A savings account becomes useful from around age 8-10 when children start managing their own money. Teenagers can graduate to transaction accounts with debit cards.

How do I teach my child about digital money?
Children see parents using cards and phones to pay, which can make money seem abstract. Explain that digital money is real money — the card or phone is just a tool to access it. Show them bank statements so they understand the connection between spending and account balances.