Teaching money skills

One of the best ways to teach kids valuable lessons about money is by giving them hands-on experience of managing real money of their own. And the best way to do this is by teaching them to manage their pocket money.

Pocket Money

People approach pocket money in a variety of ways. What suits one family may not suit the next. When deciding on what suits your situation think about pocket money as a tool to teach your kids about money.

If you're keen to teach your kids good habits and concepts about money, you're probably better to link pocket money to financial concepts - such as saving money, spending money, and making your money grow, rather than to link it to things that have nothing directly to do with money, like:

• Behaviour and emotions
• Family responsibilities - your child’s participation in routine household chores which are part of being a family member
• School work and out of school activities.

Make it easy for a child to relate to the concepts you're trying to teach. For example, if you want your young children to get into a habit of putting aside an amount of pocket money for short term saving, long term saving, spending, and giving some money away:

• Give your child an amount that can easily be divided into four like 4 x 50c
• Give them physical reminders of how they are dividing up their ‘income’, with four marked containers for their money. This way they can easily see how they're doing.

Now that you’ve read about the key concepts involved, we invite you to visit the Kids' section of Kids & Money and see the games and activities in action. Then introduce your kids to the games – they’ll find plenty of fun activities that will introduce them to financial concepts they’ll need to understand in the future.