In our world of ever advancing technology, children often don’t see physical money being exchanged. In fact, some Scandinavian countries are even doing away with physical cash altogether.

These days, money can be moved with the swipe of plastic card or a tap with your mobile phone. And, like many other things, the use of toll roads and trains are now paid for electronically.

In addition, the modern ATM may give children the impression that money does grow on trees. You just put your card in and whatever money you want comes out, without any clear connection to how hard that money was to earn.

All this can make it more difficult for your children to understand what things actually cost and how money is earned.

So what can you do about it?

Lead by example

Children develop their habits and attitudes about money from their parents. That’s why it’s important to try and use real life situations to help them understand the value of money, where it comes from and what happens if you don’t save or budget.

At the ATM, for example, explain to your children that this machine holds the money you earned through saving and hard work, and that by taking it now, you will have less to spend later.

When buying items at the supermarket, explain to your kids how goods are priced and that there are cheaper and more expensive versions of the same product. Give them a challenge to find the cheapest item or the best deal on offer. Or before you head to the shopping centre, ask your children to research online to find the best price for an item they want.

And when they are looking online, give them tips on how to shop safely and know how to spot an online scam.

Use other opportunities, such as receiving bills in the mail or handing over your credit card in a restaurant, to discuss how money works and how much things cost.

The piggy bank

The piggy bank has long been used as a fun way to teach kids about the importance of saving. Perhaps let them set a goal, for example, to buy a favourite toy, and then let them know that every time they put a coin or note into the piggy bank, they are one step closer to that goal.

Piggy banks give kids that tactile experience of saving and they can physically see their progress and count the money in their piggy bank.

Bank accounts

Australian banks offer a pretty good choice of kids savings accounts and even tools, games and activities to help them learn about money and saving.

Opening a bank account will get your children into the habit of saving and teach them about the concept of interest. It’s a good idea to go through a bank statement with your children and to familiarise them with concepts such as deposits, withdrawals, balances and even compounding interest – that’s how your savings grow as you start earning interest on the interest already received.

Pocket money

Pocket money can be a great way to develop your kids’ money skills. It will help them make decisions around money, for example, whether to spend now or save for something, and to learn from their mistakes.

Consider letting your children pay for some of their expenses with their pocket money, for example, lunch from the tuck shop, so that they start to learn how much things cost and how long their money will last.

Paid chores

While not for everyone, some parents pay their kids for doing certain jobs such as mowing the lawn, washing the car or vacuuming the floors. This teaches them how we need to work for our money. Plus, a job well done will boost their self-esteem.

Apps

Many apps exist to help children learn more about money. Here’s a brief selection of just a few of them.

Commonwealth Bank has launched the Youth app, which teaches real-life money skills to under 14s. In addition, its Beanstalk Activity Centre has a range of activities sheets to help kids of all ages learn about money and finance. Other banks will have their own offerings.

Spriggy, a mobile app designed by an Australian fintech, helps teach kids eight years and older how to make better money decisions. They get “a personalised prepaid Visa card” that provides them with a way to learn real-world money skills while their parents can keep an eye on their transactions through their own dashboard.

Bankaroo is a virtual bank that helps kids keep track of their allowance and other money. Parents can make one-time virtual gifts, schedule allowance payments or match their child’s savings.

Green$treets Unleash the Loot! allows kids to choose a cute endangered animal to rescue, then earn and save money to take care of it.

RoosterMoney helps families manage pocket money, chores and rewards and teaches children the value of saving.

Savings Spree, for children ages seven and up, teaches kids how their daily lifestyle choices can add up to big savings or big expenses, depending on how they manage their money.

ASIC’s Money Smart’s free app, TrackMySPEND, helps teach people of all ages to keep track of their expenses on the go.

Games

Many of us learnt our early money lessons by playing Monopoly, which also has a Junior version for kids age five and up. Other useful games include The Game of Life, The Allowance Game and Payday, among many others.

You can also encourage your kids to invent their own game where, for example, they pretend to be a shop owner, shopper, bank manager, restaurant owner… The options are endless!

At school

Get your kids talking about finances with their friends and in the classroom. Ask their teachers if they have heard of Banqer, an online financial education platform that helps deliver financial literacy in the primary school classroom in an engaging and relevant way.

The software transforms the classroom into a mini-economy where students transact with one another from their own online bank accounts. From there they experience budgeting, taxes, super, mortgages and much more.

Members of the Financial Planning Association of Australia are also available to support schools using Banqer, at no cost to schools.

You can also refer teachers to Banqer. They will benefit from any special offers and receive some helpful information on what Banqer can do for their classroom and students.