With social media at their fingertips, chances are your child, or children, are already forming views and opinions on money and different personal finance topics. The earlier you start having these conversations around the ‘dinner table’, the easier it will be to raise financially intelligent children who will be equipped with the knowledge and critical thinking abilities to make smarter financial decisions as they progress through life.

Unfortunately, while the education system in Australia and globally has improved over the years in their personal finance lessons, it is a far cry from being adequate. If you’re a parent wishing to raise financially astute children, you’re going to have to put in the effort and ensure that you’re equipping them with the know-how yourself.

This week our team at Ally Wealth Management shares our six top tips for raising financially intelligent kids.

1. Encourage critical thinking and independence

While it’s important to have some rules in place with regard to what you allow your child to spend their money on, it’s also critical that you encourage them to make their own decisions. This will teach them a range of important financial lessons, particularly about buyer’s remorse, and allow them to assess their spending and avoid repeating the same mistakes.

Sit down with your children, and start talking about designing a budget, what they want to save up for, and how they should look at spending their money. It can also be a great idea to have a conversation around the table about paying your bills, how you save for retirement or other financial goals, cover regular expenses and even plan for discretionary expenses like holidays. They don’t need to know the specific dollars and cents involved, but it can be a great idea to be transparent in the process with them.

2. Don’t just ‘top-up’ the pocket money

If you’re currently paying your child some form of a weekly allowance or pocket money as it’s often referred to in Australia,  where possible we’d suggest that you avoid ‘topping up’ the coffers if they run out of money. This will teach them the importance of budgeting and the consequences of frivolous spending, or not planning. Whether it’s candy, a new game, or upgrade on a game they’re already playing, or something completely different, they need to learn the importance of planning their spending.

As we all know, in the real world if our funds run out for the month, we can’t simply go and get additional funds from our employer (in most cases), so many will either plan appropriately or turn to the credit card or some other form of loan, which can be a dangerous spiral if it gets out of control.

3. Create opportunities to earn more

Does your car need to be washed? Does the lawn need mowing? Offer your children the opportunity to earn more by completing extra jobs or even learning new skills or completing courses. This will teach them the importance of work ethic, and they may also start to learn that simply exchanging time for money may not be the smartest approach to generating wealth.

You may want to go down the path of providing them with a financial reward for completing certain courses online. This can also be a great opportunity to start exploring ‘side hustles’ like buying items at a garage sale and selling them online, trading sports cards, or even creating digital content that raises money. If your child wants to make money on YouTube, TikTok, or otherwise, start exploring how this could be possible, responsibly of course.

4. It’s vital to lead by example

The old adage, ‘do as I say, not as I do’, is not going to lead to a positive result with your children if you’re not setting a good example for them when it comes to money. Be sure that you’re doing what you’re telling them to do, and let them know. Our children learn from our behaviour and habits, whether it’s how we treat people or how we manage our finances.

When it comes to planning for the monthly bills, consider getting the children involved and show them how you plan. If it’s your retirement planning or budgeting for an upcoming holiday, allow them to take part. You’ll be surprised at how the simple exercise of involving them can pay off over time.

5. Encourage them to give back

Many books and websites talk about the importance of splitting your child’s savings into ‘spending’ and ‘saving’ pots, to teach them the importance of setting a budget and sticking to it. We would suggest adding a ‘giving back’ or ‘donations’ pot, to allow them to save a percentage of their pocket money to donate to a charity or cause that they feel is important. In addition to making the world a better place, this will teach them to recognise that not’s everyone’s as fortunate as them, and the importance of giving back.

These behaviours are often things that they will take with them through adult life and continue to support those less fortunate or other important causes. There are many benefits of volunteering and giving back, and we’re certainly huge advocates for a range of charities and not for profits, so feel that this is a critical one in raising financially intelligent children.

6. Patience is key

With the onslaught of credit cards and buy-now-pay-later marketing at every turn, impulse purchases have become a major problem for many households right across the globe. We’d suggest that you sit down with your child, or children, and start planning toward a long-term goal of theirs. Whether it’s a new video game, piece of sports equipment, or some other toy, make a plan together, set a target date for when they aim to purchase the item and create a simple system that you can track together. Depending on the timeframe involved, we’d also suggest blocking out a time each week, fortnight or month to sit down with your child and review the progress made towards the goal.

By teaching them that you have to be patient and save to purchase the things you want, this will set the foundations for avoiding mountains of credit card debt and personal loans later in life.

We hope that you find these tips helpful in raising financially intelligent children. At Ally, we’re very focused on encouraging more families to start talking about money around the dinner table, wherever in the world you may be. If you have any tips you’d like to add, drop us a note in the comments.


Ally Wealth Management is the trusted ally in finance for Australians at home and across the globe. As both Australian expats and residents, the founders of Ally have a unique understanding of the common personal financial challenges faced.

Book your complimentary appointment with our team at Ally Wealth Management to discuss how we can help you to achieve your financial goals.

Ally Wealth Management Pty Ltd is a Corporate Authorised Representative of Sentry Advice Pty Ltd ABN 77 103 642 888. Sentry Advice holds an Australian Financial Services Licence (AFSL) No. 227 748.

General Advice Warning: The information contained herein is of a general nature only and does not constitute personal advice. You should not act on any recommendation without considering your personal needs, circumstances, and objectives. We recommend you obtain professional financial advice specific to your circumstances.