Teaching kids money matters

How to help your children to understand the value of money in a cashless world.

When was the last time you or your children paid for something with cash? 

Between tap and pay, Apple and Google Pay, and buy now, pay later schemes, the concept of handing over cash has become a distant memory. 

With cashless payments increasingly popular, many families struggle to help their children understand the value of money.

So, how do you set up your children for financial success?

You should start by reflecting on what you do with, and say about, money in your home. 

RACQ's Jessica Colquhoun said children were sponges, so the way we managed and talked about our money would influence them.

“How and how often you talk about money in your home can shape whether your children perceive managing money as difficult, secretive, easy or effortless,” Mrs Colquhoun said.

“Try to be as transparent and honest as you can be, it will help dispel any myths they might have about where money comes from and hopefully instil more value in it for them.”

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Secondly, help them understand why they want to spend.

It can be really easy to get caught up in the “fear of missing out” (FOMO) and feel like they have to keep spending to keep up with their friends, the latest trends or what everyone is buying. 

“Whether it’s the latest toy, a new phone or an outfit for the weekend, children of all ages feel pressure to keep up with those around them,” Mrs Colquhoun said.

“This pressure can be really hard to ignore, but it’s important our children understand why they want to purchase something and whether the item or memory will hold its value for them.”

Finally, teach them how they can practically make conscious choices with their money to understand the domino effect of spending. 

“Let them know they can stop, pause and think about whether they’re truly happy to make this choice and whether it’s worth not having the money to use for something else,” Mrs Colquhoun said.

“They could ask themselves, ‘Am I spending tomorrow just to live today?’, go for a walk around the shopping centre, message a friend or sleep on it. 

“Learning to make conscious choices is a really important tool to help children value money, especially if they can’t count it in their hands like cash.”

For more information on teaching your kids about money, visit RACQ.com/financialwellbeing.

The information in this article has been prepared for general information purposes only and not as specific advice to any particular person. Any advice contained in the document is general advice and does not take into account any person's particular investment objectives, financial situation or needs. Before acting on anything based on this advice you should consider its appropriateness to you, having regard to your objectives, financial situations and needs.