How to teach your child to budget money? Ask them this one thing.





You know that fun conversation you have when there’s a big lotto draw?

‘Wow – what would I buy if I won ten million dollars?’

Would I pay off family and friends’ mortgages?

Give a chunk to charity?

Buy property? A swish car? Live in New York for a year?

Just as an FYI, you should know that this post is sponsored by the Commonwealth Bank. But all opinions expressed by the author are 100% authentic and written in her own words.

It’s a good one to throw into a dinner party if it feels like conversation is flagging, but have you tried it with kids? I recommend it as being both fun and fascinating.

And it needn’t be a ten million bucks. Try a hundred to start with. Kids under four will think that’s enough to buy a space shuttle so this is most relevant to those at least over six years of age.

I asked my seven year old what she’d do if I gave her a hundred dollars.

Of course her first question was one of denomination, ‘Would it be one piece of paper money or lots of paper money or all coins or some paper money and coins?’

The conversation about how that didn’t really matter took twenty minutes, but eventually she told me what she’d buy:

• A cover for her iPod Touch ($15)

• A family pack of ‘spotted cow’ ice cream from the overpriced ice cream bar up the road ($20)

• A new bike helmet (fluro orange $35)

• A white rat from the pet shop (no way, but for argument’s sake, $20)

• A wooly hat that looks like an Angry Bird ($20)

My maths is pretty bad, but even I could work out that she’d be $10 over budget. I explained this to her and suggested that the rat might be the first thing to go.

I also pointed out that there was nothing in there for charity – maybe a few dollars for the collection they’re running at school for the health clinic in Zambia.


And how about money for a snow-cone after hockey on Saturday? Or a present for ME?

A little recalculation was necessary. The rat stayed but the family pack of ice-cream turned into a box of Paddle Pops for half the price. Lesson learned. Parenting points to me.

It’s hard to get your head around when you’re small – and even when you’re 45 (ish) that money is a limited thing.

They need money for spending, some for saving (for things like iPods or clothes), some for ‘wealthing’ (to be banked for higher education, a house, other investments looooong term stuff), some for gifts and some for charity.

And if your kids receive pocket money, it’s a good idea to pay them in cash using different notes and coin combinations so that they can easily divide it up. You can even buy ingenious moneyboxes that are divided for this kind of thing (the ‘wealthing’ compartment is locked) but envelopes or snap-lock bags are handy too.

For kids, planning how they’d spend this mythical $100 is fun. For me, not so much. My $100 wish list would look like this:

• Bread


˚ Meat

• Fruit and Veg

and …. Lotto ticket.


Check out our gallery of things kids would more than likely spend $100 on, if they had the choice:

As Australia’s leading financial institution, the Commonwealth Bank is committed to helping young 

Australians develop strong money management skills and form sensible saving habits that can last a lifetime. Along with a range of savings accounts, including one designed especially for under-18s, and their well-established School Banking program, they offer a diverse range of initiatives designed to promote financial literacy. For more information visit their site.

This post is sponsored by the Commonwealth Bank. Comments on this post are just for this post. If you have questions about sponsored posts or the choice of advertisers please click here.

 Have you ever asked your child what they would do with a large sum of cash? Wondered how to teach your child to budget money? What is the strangest thing your child has ever wanted to buy with their pocket money?