The New Year is well and truely upon us and the kids have trundled off to the school-yard. Curricular-a-plenty will be firing up, to fill your kid’s brains with who-knows-what.

But what about ‘Financial Education’ for your kids? Who’s responsible for this? Ultimately – you are!

We don’t talk about this much in society, but in my role as a Financial Adviser, I see this as a fact that needs to be addressed: Financially Literate Parents = Financially Literate Kids.

Teaching your kids about money

I’m not talking about parents becoming financial markets gurus or serious investors (although that would be nice) – I’m just talking about simple steps that will ensure your kids get off on the right footing. This foundation could very well set your kids up financially for the rest of their lives. Let’s look at some key avenues that you as parents can easily adopt and explore.

Don’t Talk Negatively About Money

Put your hand up if you heard any of these statements from your parents when growing up: “I hate money!” “Will we never get rid of this credit card debt?!” “Let’s just get a loan on the house to take this holiday/buy that car”. “We can’t afford that!” Or how about growing up and being party your parent’s full-blown arguments related to money?

Do you know what’s happening in a child’s mind when they consistently hear and see these exchanges related to money? They form a long lasting negative outlook on money, how it badly affects the family, and that it’s ‘normal’ to have mountains of consumer debt. Their perception? Money is BAD! Please don’t get me wrong, I’m not asking that you raise your kids to be “lovers of money” – that’s not what this is about. I’m simply saying that your reactions to money and debt will most definitely rub off on your kids and will probably be the foundation that they build their financial literacy on.

In short: Be VERY careful how you talk about money around your children. Think about what you’re instilling in them just by what they overhear or see from you. They’re taking it all in!

Get Saving

Getting your kids started in a savings plan as soon as you can. This could be a plain old bank account or you could make use of the Government’s KiwiSaver scheme.

The government is still giving all KiwiSaver starters a $1000 kick-start so set your kids up, wait for the $1000 kick-start, then show them the balance of their KiwiSaver account. Get their buy-in that they’re growing savings to help them in the future. Let them see how invested money grows over time. The younger they are, the longer they have to benefit from compounding interest.

And, when they see how their investment ebbs and flows with the economy, they’ll quickly start to appreciate how markets work, and how this benefits them over the long term. If you can afford to, start a direct debit with weekly amounts being deposited. This can be as little or as much as you want. There’s no rule that says kids under 18 have to put money into their KiwiSaver. But, if you start a savings plan for them now, you can show them how it grows, and tell them that this money can be put towards buying their first home (under current law).

In short: Have a savings plan for your children, but don’t do it behind closed doors – Show them the money going in, show the updated balances, show them how their investment is growing –

Reward the Kids for Cheaper Household Bills

Kids cost a lot of money right? Right!

So, why not ask them to help you defray some of those costs by getting their input into how you can cut down on household bills and expenses? This could be anything from cutting down on calling cell-phones from the home phone, to buying cheaper brands at the supermarket. Even things like turning off electricity sucking items in their bedrooms to save on power. Again – just try to get their buy-in with helping your family to save money on bills and expenses.

Here’s the kicker – reward them if they help knock down the costs! Yup, give them some moola for helping you with this project! Easy! Here’s an idea: Average out what your particular expenses are costing you monthly one-by-one. Or just choose one at a time to tackle. If your child’s actions reduces these costs below the average, split the savings 50/50 with them. In other words, give them 50% of the savings in cash as a reward. You’ll definitely have their buy-in now!

In short: Get the kids to help with saving money on household bills and expenses. If you get those costs down, split the savings 50/50 and reward their 50% with cash.

Teach Them About Credit Cards and Loans

My blurb here is pretty well covered in the section above about how you react to money in front of the kids.

Simply put, teach the kids from a young age that credit cards and loans are there only when absolutely necessary. Credit cards should not carry balances over, and should be dissuaded as a payment method altogether. Only if you’re able to pay off the balance monthly, should you allow your kids to see the plastic being flashed about. They must understand that balances are cleared and that consumer debt is ‘bad debt’!

You can even practise this principle in your family. If your child wants an ‘advance’, consider charging interest on the amount so that they begin to understand the real cost of borrowing.

Here are some great websites that can help you help your kids to become more financially literate:

Sorted’s section for parents

Online games to teach kids about money

Teaching kids about money

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This article was written by Daniel Carney. Daniel is an Authorised Financial Adviser at Goodlife Financial Advice* and is also a proud dad to two gorgeous kids. He's fanatical about the need to help kids become financially literate and can't wait until his own kids are old enough to play Monopoly with him. When he's not helping people sort their finances, Daniel plays guitar and drums in a band and enjoys spending time with family and getting lost in a good book. *A disclosure statement is available, on request and free of charge by calling 0508 GOODLIFE.

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[…] you can read about the allowance system my parents ran for us on this discussion over at Kiwi Families. My Mum was an economics teacher and has lots of useful stuff to […]


It’s funny the details we remember or remember differently!  I’m the eldest and remember being inspired by hearing that my friend Alice’s mother gave her and her sister their ‘child benefit’ money each week – the universal payment that got scrapped in the 1990s.  I think I started in 1988 at $16 per week, with a monthly AP into my bank account.  I also got an EFTPOS card with this arrangement, at the age of 10.   Whatever the details, the system was great.  It sped up my learning about saving and spending and made all my friends jealous 🙂… Read more »


In response to requests for more details – we have three daughters, and in their early years we were particularly blessed by having a friend with older daughters who delivered boxes of clothes to us at the end of each season.  However there came a time when “second hand” clothing was considered less of a luxury by the wearers!  Initially I tried to respond to my daughters requests for trendy / new / ‘everyone else has one, why can’t I’ pressure.  The foolishness of this finally dropped when garments were being worn once and then discarded as unsuitable / no… Read more »

Rochelle Gribble

Thanks Esmee!!! What a great system! 


Yep I remember frugally squirreling my money away until the junior dance and squandering it all on overpriced labels. That phase was over quickly! (I am the op shop daughter!)

Daniel Carney AFA

Hi Esmee – Yes – please share your experiences so that the other readers can benefit. That would be MUCH appreciated!

Daniel Carney


What worked well for us, was offering our children a “living wage” from the time they were 10.  They all accepted, helped prepare a realistic budget, and agreed to participate in household work – especially each child cooking one evening meal a week.  School related and activity related expenses were excluded.  Or main motivation (apart from them gaining a sense of the value of money) was so we no longer had to cope with “Mum can I have …” type requests.


Hi Esmee- any chance you could share the details?- sounds great!


Great tips, thanks for that, now to practicing them on my children.

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