There are many reasons we fall into the trap of overspending. One reason is we get bombarded with very effective advertising on social media where data scientists and algorithms seem to know what we will be tempted by before we do.

Perhaps we are emotional spenders and buy things because it feels good. Maybe we’re trying to keep up with the Joneses, or perhaps we lose track of how much we’re spending when we pay with plastic or we never set up a budget in the first place. Whatever the reason, the temptation to overspend is real and powerful. Which is why it’s crucial to teach kids to be smart with money, particularly how to spend wisely.


By taking the time to teach your kids about money, you’re giving them a better chance to enjoy financial wellbeing as adults. But where do you start?

Handling money

Researchers at Cambridge University found that children develop financial understanding when they have their own personal ‘economic experiences’. That means, to help your child to learn to spend wisely, it helps to involve them in some financial decisions, and to give them the responsibility of handling some real money.

Here are some ideas for games and activities for kids at different ages:

Fun for toddlers to age 5

Cash register or shopping games are a fun way to introduce your kids to the idea of how money works. You can write shopping lists together, and practise paying for things and counting out change. These games can also be a simple way to introduce basic maths - adding and subtracting.

Activity for 5 to 10 year olds

Give your child money at the supermarket - around $5-10 - and ask them to make choices about what fruit to buy within guidelines that you set. This gives them a direct, personal and economic experience about what it feels like to make choices with money within a budget.

Activity for pre-teens

Give your child the responsibility of planning one category of shopping for the week - for example, fruit. They can plan and write a list and look for specials. If they manage to come in under budget, they can keep the change.

Activity for teenagers

Find a deal - Giving teenagers real responsibility with money in the household can teach them important money skills for life. For example, give them the responsibility of finding the cheapest petrol each week to fill up the family car. Or get them to shop around among electricity providers and see if they can find a better deal. If they succeed, a good way to reward them is to give them part of the discounts they find as cash or pay them a ‘commission’.


Stick to a budget

Also find opportunities for your teen to make choices within a budget. For example, get them to select and pay for their own data plan for their phone. If they go over their data allowance, they’ll have to forego spending on other items.

Becoming wise with money

Remember that making mistakes is an important part of becoming wise with money. If your children have overspent, think twice before bailing them out. It can be a good opportunity to learn about the implications of not sticking to a budget and not spending wisely.

Role model smart money habits

As well as learning by doing, kids learn by watching and listening. It’s helpful to role model and explain the types of healthy money habits you’d like them to develop, and to start conversations about the choices you make with money.

For example, if you have young children, start by having conversations while you’re out shopping. If you’re at the supermarket, try explaining to your little ones that the reason you bought the ‘home brand’ sauce is because it costs $1 less and tastes the same. Or talk about why you stocked up on the detergent while it was on sale, or that you can get frying pans cheaper at another store, or the reason you bought paper towels in bulk was because it worked out cheaper per item.

For children at all ages, it’s useful to demonstrate shopping around for better prices. This could be done online together at home, or out and about when shopping. Also talk to them about sticking to a budget.

It’s never too early to start your children on the road to financial wellbeing as adults.

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