PARENT OPINION: “The 7 money conversations I think every parent should be having with their primary school-aged kids.”

As someone who has taken many years — and a lot of mistakes and stress — to develop a reasonable level of financial literacy, ensuring my own kids are better prepared to manage their own finances once they fly the coop is really important to me.          

Aside from learning to count change, there wasn’t a whole lot of education around money when I was a kid as far as I can remember. My pocket money was cash, and I invariably spent it on lollies and magazines. 

Even if there had been more information available, the way we handle money has changed so much over the last few decades that it would be largely irrelevant for today’s kids. 

So, when my kids started getting pocket money, it was really important to me that they learn to use it in the way they will in the ‘real world’, and that we talk openly about money in age-appropriate ways from when they're little. 

These are the 7 money conversations I think every parent should be having with their primary school-aged kids to give them the best chance at financial literacy (and success).

1. Don’t be afraid to talk about money

Like me, you might have been raised to believe that talking about money, religion or politics is the height of... well, rudeness. 

But we need to throw this belief out the window if we’re going to demystify money. Let your kids ask questions and answer them honestly and age-appropriately, and get comfortable saying things like, “No, that’s too expensive — how about this instead?”. This will help them feel comfortable turning down things they can’t afford, as well as realising they can come up with less-expensive alternatives. 

For example, “I can’t afford to take you to the movies today, but we could make some popcorn at home and watch a movie on TV."

Image: Supplied.

2. Talk to them about how much things cost

Do you remember the first time you paid rent, a utility bill, bought a tank of petrol or even a tub of laundry detergent? You were probably very shocked to discover just how expensive everyday needs are... not to mention, completely overwhelmed. 

You don’t need to sit your kids down in front of a spreadsheet to teach them the price of essentials; it can be as easy as letting them help scan items at the supermarket checkout or getting them to help do the shopping, with the challenge of keeping the final bill under a certain amount. 

This is also a great math lesson: if they’re a bit older in primary school, see if they can work out how much the fresh produce will be by weighing it. You can pass on those little life hacks you’ve picked up too (like that loose produce is cheaper than the same product pre-packaged). 

3. Learn about needs versus wants

While young kids’ needs are generally still paid for by their parents, you can still start teaching them to prioritise what they’re spending money on. For example, if your child has been invited to bowling with a friend this weekend, you could say, “Okay, I’ll buy your entry to a game of bowling, but if you want lollies or popcorn, you need to pay for it with your own money.” 

If in the meantime they want to buy, say, a new toy that would leave them short for bowling, help them understand the choice and the consequences. 

Image: Supplied.

4. Saving and spending

It’s a good idea to set your kids up with a savings account (the CommBank Youthsaver account rewards regular savers with bonus interest) to learn how to save — perhaps setting aside a percentage of their allowance (another math lesson!). 

If there’s something they really want, have them research the price and set a goal. For example, if they want a $500 Virtual Reality headset (why does every kid want one of these right now?), help them work out how much they would need to save and for how long to save enough. 

Talk about instant versus delayed gratification: “yes, you could buy X for $20 now, but if you really want Y, you’ll need to save it instead."

It’s one thing to teach them about saving in theory, but there’s nothing like the satisfaction and pride they’ll feel when they save enough for something they really want. 

Image: Supplied.

5. Give them a bank account and debit card

Cash is rarely used these days — and even less so since the start of the pandemic — so why always give your kids pocket money as cash? 

Accounts like the CommBank Smart Access Account for Youth, a transaction account for under 14s, offer debit cards for kids 9+ years with parental controls. You can view and manage the account together through the CommBank app.

The parental controls include spend notifications, to help keep an eye on your child's spending and saving, as well as setting weekly spend limits, limiting access to things like international payments, and being able to lock the debit card temporarily if it gets lost.

This gives them the opportunity to build experience with the skills they’ll need for when they're older, like monitoring their accounts online, transferring money, and using their card to make purchases in-store and online. They’ll also be able to make the connection between the number on the screen, and what they can buy with their card (as opposed to thinking a debit card is a magical, unlimited key to the world!).

6. How to set a budget

Budgeting is such an important life skill, but frequently overlooked.

You can teach them to make their own budget even if they only have a small allowance, including money to spend now and money to save for a goal, and you can also involve them in the household budget in fun ways. 

For example, coming up with a meal plan and shopping list within a certain budget, with a special treat allowed if there is change left over. This is a fantastic way to teach them the implications of overspending too — making mistakes is a learning opportunity!

7. If it sounds too good to be true, it probably is

It’s a cliché, but we need to remember our kids don’t have our level of experience and without guidance, can be vulnerable to scams, which are unfortunately becoming more sophisticated. From the very basics like creating strong passwords and not telling anyone your password or PIN, to how to recognise scam and phishing messages and emails (CommBank have some useful online resources for this), it’s a good idea to start young. 

It isn’t always easy, but letting your kids make a few mistakes along the way is an important lesson. 

Don’t be tempted to bail them out (it’s hard, I know), but you can empathise with them if they’ve overspent and missed out on something else as a result and help them reflect and work out what they could do differently next time. 

By having these conversations, hopefully by the time our kids hit high school and beyond, they’ll have the skills necessary to manage their finances effectively and develop a healthy relationship with money.  

CommBank have all you need to teach your children about money. Check out The Beanstalk's guidance, videos and activities for young kids and teens.

This article is intended to provide general information of an educational nature only. It does not have regard to the financial situation or needs of any reader and must not be relied upon as financial product advice.

You should consider seeking financial advice before making any decision based on this information.

The target market for the products mentioned in this article will be found within the product’s Target Market Determination, available here.

Feature image: Supplied/Mamamia.