It’s tough when children want the latest gadgets, games, or toys – and they want them now. But teaching kids about money isn’t just about saying ‘no’ to purchases. It’s an opportunity to shape their financial future. From an early age,  children can learn the basic principles that will guide them in making smart financial decisions. Teaching budgeting, saving, and the difference between wants and needs builds a solid foundation for developing a healthy relationship with money and future financial success.

start early

The best time to introduce your children to money concepts is as early as possible. Young ones can learn by observing how money is earned and spent in everyday life. Simple explanations – like how you pay for food, housing or utilities – can help them start to understand the basics.

• Use real-life examples like paying for groceries or rent
• Introduce pocket money or games like playing shop
• Adapt your explanations as your child grows

wants versus needs

One of the most crucial lessons in financial literacy is understanding the difference between wants and needs. Essentials like food, clothing and electricity are needs – we can’t live without them. Wants, like toys or gadgets, are nice to have but not necessary. Parents can use everyday activities like grocery shopping to explain the difference.

• Use shopping as a way to point out needs vs wants
• Show how overspending on wants can impact savings
• Talk about making trade-offs to reach a bigger goal

lead by example

Children learn best by watching what you do. Being a positive role model when it comes to money helps them develop the same good habits. Talk openly about your financial decisions, and explain why you’re making them – for example, choosing not to buy something so you can save for a holiday.

• Be honest about your money decisions and past mistakes
• Show how your spending matches your values
• Demonstrate thoughtful saving and budgeting in daily life.

show them how money is used

To help your children understand how money flows, give them hands-on experiences. Earning pocket money for chores, saving for a special item, and using that money to make a purchase all reinforce how money works.

• Let them earn and spend their own money
• Compare prices together and explain receipts
• Talk about how cash and digital payments work differently.

teach budgeting and saving goals

From saving coins in a jar to tracking pocket money in an app, your children can start learning to budget at any age. Encourage them to divide their money into different goals – some to spend, some to save, and maybe a little to give to a cause they care about.

• Help set savings goals for things they really want
• Use bank apps or jars to track spending and progress
• Reward saving milestones and talk about the dangers of debt.

final thoughts

Raising financially savvy children doesn’t happen overnight – it takes time, patience, and lots of real-life practice. But every conversation you have about money, every choice you model, and every lesson you share helps build their confidence and understanding. Financial literacy is a lifelong journey, and the lessons learned in childhood can set the stage for a financially responsible future.

• Keep money conversations open and age-appropriate
• Use real-life moments to teach and reinforce good habits
• Remind them it’s okay to make mistakes – that’s how they learn.

With the right guidance, your children will grow into adults who feel empowered to manage their finances with confidence.

For further information or to book a complimentary meeting, please phone 03 9863 311, visit bongiorno.com.au or email enquiry@bongiorno.com.au

Vanessa Smith BBus (Acc), CFP^®, SSA®, Adv Dip FS (FP), Cert IV FMB |director – advice 

As this general advice has been prepared without taking account of your objectives, financial situation or needs, you should consider the appropriateness of this advice before acting on it. If this general advice relates to acquiring a financial product, you should obtain a Product Disclosure Statement before deciding to acquire the product.