Source: The Conversation (Au and NZ) – By Angel Zhong, Professor of Finance, RMIT University
As parents prepare for another school year, there’s one subject that often gets overlooked: money.
Financial literacy isn’t just about numbers. It’s about building skills that will shape your child’s future decisions, from buying their first car to planning for retirement.
The good news? You don’t need to be a finance expert to teach these lessons. Start with age-appropriate concepts and build from there. Here’s what to focus on at each stage.
Primary school (ages 6–12): Making money real
Young children understand money better when they can see it and touch it. This is the perfect time to introduce pocket money – a regular allowance that teaches them money doesn’t appear magically. And once it’s gone, it’s gone.
Start small. Five dollars a week gives a seven-year-old enough to make choices without overwhelming them. Should they buy that chocolate bar now, or save for three weeks to get the Lego set they really want?
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This waiting game is crucial. It teaches delayed gratification, which research shows is linked to better financial outcomes later in life. When your child saves for weeks to buy something they’ve been eyeing, they’re learning that big goals require patience and planning.
Use clear jars or piggy banks so kids can literally watch their money grow. It makes saving visible and satisfying. Some families use a three-jar system: spending, saving, and sharing (for charity or gifts). This introduces the idea that money serves multiple purposes.
Let them make small mistakes too. If your eight-year-old blows their entire allowance on stickers and regrets it by Wednesday, that’s a five-dollar lesson that could save them thousands later.
Secondary school (ages 12–18): Real-world money management
Teenagers are ready for more complex financial concepts. This is when you shift from teaching about money to teaching with money.
Open a bank account together. Walk them through how banks work. Tell them that banks are not just storing money, they’re businesses that pay you interest to keep your money there and charge interest when you borrow. Explain that the interest you earn on savings is usually tiny, while the interest you pay on debts is much higher.
Introduce the concept of debit cards, but explain how they differ from credit. A debit card only spends money you already have. This is a good time to show them how to check their account balance and track spending through banking apps.
Talk about wants versus needs. Your teenager needs school shoes. They want the $200 branded pair. This isn’t about saying no. It’s about showing them trade-offs. “If you want those shoes, you’ll need to contribute $100 from your savings. Are they worth it?”
If your teenager gets a part-time job, teach them to check they’re being paid correctly. The Fair Work Ombudsman website has easy tools to calculate award rates, the minimum pay rates set for different industries and age groups. A 16-year-old working in retail should know what they’re entitled to earn.
This is also the time to introduce the concept of paying yourself first. When money comes in, savings come out first. Even putting aside 10% teaches the habit of treating savings as non-negotiable – it’s not whatever is left over.
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School leavers (ages 18+): Building wealth basics
Young adults entering work face a new financial landscape. They’re earning more, but expenses grow too, such as transport, social life, and maybe rent.
Start with superannuation. This is money an employer must put aside for an employee’s retirement. It may seem irrelevant when your child is 18, but a young person who understands super early has a massive advantage.
Here’s why: compound growth. Money invested at 18 has 40+ years to grow. Even small amounts become significant. If you put an extra $20 a week into super from age 18, you could have at least an extra $300,000 by retirement, thanks to compound returns. That’s the snowball effect, when the investment gains on your contributions start earning returns as well.
Introduce investing apps, but with caution. Digital investing apps such as CommSec Pocket and Stake make investing accessible with small amounts. They let young people buy into diversified funds, which are collections of many different investments, rather than trying to pick individual shares.
Explain the fundamental trade-off: higher potential returns come with higher risk. Shares can grow more than savings accounts, but they can also fall in value quickly.
Teach them about the share market without jargon. When you buy shares, you own a tiny piece of a company. If the company does well, your share becomes more valuable. If it doesn’t, your share can lose value.
Diversification – spreading money across many companies – reduces the risk of losing everything if one company fails.
The lessons that matter most
Financial education isn’t really just about money. It’s about decision-making, delayed gratification, and understanding that every choice has trade-offs. It’s a life skill you build over time, one conversation and one decision at a time.
The most valuable lesson you can teach at any age? Money is a tool, not a goal. It gives you choices and security. Teaching your children to use that tool wisely is one of the greatest gifts you can give them.
Start these conversations early. Make them normal. And remember, you’re teaching as much by how you handle money as by what you say about it. Children notice when you compare prices, when you talk about saving for holidays, when you decide something isn’t worth the price.
Angel Zhong does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.
– ref. Back to school: what are the money lessons to teach your kids at every age? – https://theconversation.com/back-to-school-what-are-the-money-lessons-to-teach-your-kids-at-every-age-272075
