Talking to kids about money – and teaching them how to save and value it – doesn’t always come easy. The good news is that while kids might tune out dry explanations, apps are turning that information into colourful, interactive games and graphs that bring financial literacy to life. Here, Wendy Allott, a learning designer at CommBank’s new pocket money app for kids, Kit, shares ways to help kids become confident and capable money managers.
What are the key things kids need to understand about money?
Start talking about money as soon as your child shows signs of understanding the idea – usually around the age of four. Teach them to recognise coins and notes and different ways of paying for things. Help them understand that money has to be earned – it doesn’t appear out of nowhere – and that once it’s been spent, it’s gone.
How can kids understand the value of money if they don’t have a moneybox?
It’s easier for kids under the age of 12 to understand money when they can see and feel it. But money is becoming invisible – often these days, children don’t put real cash in their moneybox and take it out again. Kit has been designed to make digital spending as visible as possible. Using the app, kids see their balance go up and down and watch the water levels in their savings stack rise and fall as they save or spend.
When should I start paying my kids pocket money?
That’s different for all families, but the age of five or six is generally a good time. Around that age, children are learning about money in school and they might notice things their friends do or don’t have and mix with children whose families are more or less financially well-off. The more children are exposed to thinking about money, the more comfortable they will eventually become with it.
How can I talk to kids about money pressures and mistakes?
Modelling positive financial behaviour and ensuring that your kids see that behaviour is important. For example, you can make a point of saying, “I really wanted that dress, but I’m going to have to save up for it.” That way, children see that you’re working and saving for something you want. And share money mistakes, too – we all make them.
How should the money conversation evolve as kids grow?
Bring your kids into discussions about the family budget and how much your utility bills, rates and groceries cost. Talk about how you organise your money to cover everything you need to pay for. Don’t leave your children out of these cost-of-living talks – you want to send them out into the world prepared.
How important is it for kids to have their own savings goal?
Being able to set and meet goals is tough – you have to know what you want, how to get there, and resist temptations. That’s hard for adults and even harder for kids. For them, meeting their goal isn’t the crucial aspect – it’s goal-setting behaviours and seeing the outcomes of hard work. Saving is a skill that can be learnt – it’s not a personality trait. Don’t tell your child, “You’re just not a saver” or “It’s just the way you are.” Let children know that if they work on saving, they will get better at it.
How can play help teach kids about financial literacy?
It lets kids fail without fear – the experiences are lifelike but the money isn’t real, so kids can experiment without worrying about losing anything. Kit helps kids practise financial concepts with Money Quests, which are games in the app, including a goal-setting one where kids have to buy a house-warming gift for Kit. Another quest focuses on recognising scams – kids work with Kit to find clues in emails and text messages that show they’re from a scammer. Parents even tell us that their kids teach them about spotting scams!
In a YouGov survey commissioned by Kit, 77% of parents said their children were interested in learning about money
How to talk to kids about money every step of the way
If you’re wondering what your kids should already know about money, use this financial literacy framework to help guide your conversations.
4-7 years old
- Can identify coins and notes and understand that value is not related to coin size
- Understand money can be exchanged for goods
- Create ‘mini shops’ to pretend to sell things to others
- Know that they can put away money to use later
8-10 years old
- Can delay making impulse purchases
- Can track and monitor their own earning and spending
- Can read basic financial documents, such as receipts
- Can identify income-generating opportunities in everyday life
11-13 years old
- Know consumer rights and responsibilities (like getting a refund)
- Can explain how investing and compound interest work to create wealth
- Can develop and manage a personal budget on their own
- Feel that saving money will benefit them in the long-term
Start using Kit – The kids pocket money app
- Download the Kit app from the App Store or Google Play Store.
- Create a Kit account and add up to five child profiles, each with a prepaid card.
- Let your kids learn, earn, and save.