Ryan Boyd 22 Feb 2022

We teach our kids reading, writing and maths, but what about money skills?  Do they know where money comes from? The difference between a need and a want? And, crucially, do they know that if they save rather than spend, they can buy something even better down the line?  

Three of Westpac’s clever money minds - Financial Wellbeing Programme Managers Warren Ngan Woo and Anokha Chand, and Social Impact Sustainability Manager Sum Green - got together to help put together this list of dos and don’ts for how, when, and why you should talk to your kids about money. 

Here’s what they came up with...  


DO introduce children to money at an early age 

For primary-aged children, have conversations about what money is, how can you use it, and help them understand where their money or their parents’ money comes from. For younger children it may be a harder concept but try to introduce to what is a need vs a want. 

Teaching the concept of money from a young age is a great way to embed those behaviours in your children. 

“From experience, I introduced the kids to money concepts by opening accounts for them at a young age,” Warren says, “so that family and grandparents could put money in for birthdays and milestone events.” 


But DON’T keep it abstract 

If you’re teaching these things, it needs to feel relevant and applicable to kids’ lives at that point in time. 

One example of this is involving your children in the supermarket shop. Set them a budget and anything they have left over they can spend on something they want (preferably something healthy).  

This way they need to work out what is the best deal, if there are substitutes they can make, that home brands might be cheaper etc.  



DO make them earn their pocket money 

Rewards are good to encourage positive behaviours and set a positive mindset with regards to money. If started at a young age, this will assist young people to have good financial behaviours as adults. Work plus saving now leads to bigger rewards later on. 


But DON’T reward things that are expected 

However, pocket money shouldn’t be for everyday things expected of someone as a member of a family (e.g. setting/clearing the table, tidying your room). They need to go over and above, for example cleaning the windows. 

“Personally, I think the purpose of rewarding children with money is to show money isn’t ‘free’ and you need to work for it,” Sum says.   

“I don’t think it should become the incentive to do well at school or to help out around the house.” 

“How my parents were with me,” Anokha says, “I had to understand the ‘why’ before I was rewarded. For example, why it is good to help around home? After I understood the why, I started getting monetary gifts.” 



DO encourage saving 

Having a good conversation around savings and being involved with what savings looks like for your child will help shape those positive behaviours to save. 

One popular saving style is the 50/30/20 concept - 50% of pocket money goes to savings, 30% goes into spending on wants, and 20% on giving. Use buckets or similar so kids can visually observe their progress. As they grow older, the habit will hopefully stick. 


But DON’T make them save for the sake of saving 

Saving without a goal isn’t motivating for kids. If they can’t see an end goal for their efforts, or the end goal is too far away (e.g. a house, retirement), they may lose enthusiasm and interest. 

Keep realistic and achievable goals, and if possible, make it visual so they can keep track of their progress. 



DO be open about your own finances 

For whatever reason, people in New Zealand are often reluctant to discuss their financial situation with others, including their children. 

As parents you are role models and children learn from you how to manage their finances, so the more honest and open we are, the more confident and knowledgeable future generations will be. 

Involve them in the household budget discussions, as this will help them learn about living within their means, setting priorities, and differentiating between needs and wants. 


But DON’T wait until your finances are perfect 

If your finances are not in ideal shape, use this as an opportunity to take your children on your journey to financial security. Show them how you pay off debts, look for specials, and save up to buy the things you need and want, and as you make progress, they will hopefully learn better ways to budget and save. 

However, try to keep it a positive experience, as we don’t want to put any unnecessary stress on our children.