We live in a world where money is becoming increasingly important.

As interest rates and inflation continue to rise, and the most common products and services we purchase become more expensive, it’s more important than ever for children to understand how to manage money.

Whether you have children of your own, grandchildren, or (adopted) nieces and nephews, or plan to have children at some point in the future, you can play an important role in educating them financially as another way to pass on your financial development.


It’s never too early to start learning about personal finances.

Money is a fundamental part of our lives and the earlier we start learning about it, the better equipped we’ll be to make sound financial decisions later on in life.

These skills are essential not just for managing finances, but for everyday life. By teaching kids how to budget and make responsible decisions with their money, parents can set them up for success both financially and personally.

That’s why it’s so important for parents to teach their children about financial literacy early on.

What does it mean to be financially literate?

Financial literacy is the ability to understand and use financial concepts in order to make sound decisions. This includes understanding things like credit, budgeting, investing, and saving.

It’s important for parents to be financially literate so that they can teach their children how to manage money wisely.

Why Is Financial Literacy Important?

There are a number of reasons why financial literacy is so important, for parents and children.

Financial literacy helps children develop important life skills such as goal-setting and decision-making. 2. Children who understand that money doesn’t grow on trees are more likely to save their pocket money and think twice before spending it.

Financial literacy has been shown to boost academic performance. A recent study found that students who received financial education had higher grades in maths and were more likely than their peers to enrol in University.

How Can Parents Teach Their Children about Financial Literacy?

There are a number of ways that parents can teach their children about financial literacy. One way is to set up a pretend bank account for them where they can deposit allowance money each week. Another way is to help them save up for something they really want by matching each dollar they save.

Parents can also teach their children about budgeting by giving them an allowance that they have to use to pay for things like snacks, entertainment, and clothes.

Whatever method parents choose, the most important thing is to be patient and keep the lines of communication open so that children feel comfortable asking questions and learning more about money.

Teach your children about financial literacy by setting an example

One of the best ways parents can teach their children about finances is to lead by example.

Show your child how you save money, how you make wise spending decisions, and how you manage your debts. You can also teach your child about budgeting by giving them an allowance and helping them track their spending. There are also a number of great financial literacy resources available online.


The most important thing is to be patient and keep the lines of communication open so that children feel comfortable asking questions and learning more about money.

Parents play a vital role in teaching their children about financial literacy. By starting early, making it fun, and letting them make mistakes, parents can set their kids up for success both financially and personally.

Financial literacy is an important life skill that will benefit your child in many ways, so don’t hesitate to start teaching them about money today!

How do humans approach complex, sometimes stressful and emotional financial decisions?

Behavioural Economics

Traditional financial theories are well constructed to make many calculated financial decisions. However, they have been unable to explain the seemingly irrational human disruptions in stock markets, stock market bubbles, market overreactions or under reactions and momentum and reversals against what would be considered objective evidence.

Behavioural Economics – A New Financial Frontier?

That’s exactly what behavioural economics – the study of psychology as it relates to the economic decision-making of individuals and institutions – seeks to answer.

We know that humans are emotional beings. These emotions are capable of influencing the decisions we make in our financial lives – often in unexpected ways.

Behavioural economics draws on insights from the fields of psychology and economics to explore why people make irrational decisions, and why behaviour does not follow predictions of ‘rational’ economic models. As humans are emotional and easily distracted beings, they make decisions that are not necessarily in their self-interest… which also shows a lack of self-control.

Professor Richard Thaler, the Nobel Memorial prize winner in Economic Sciences from the University of Chicago, inspired the creation of the term called ‘nudge units.’ This is the notion that there are many opportunities to ‘nudge’ people’s behaviour by making subtle changes to the context in which they make decisions.

Where Have We Seen ‘Nudging’ In Action?

An example of behavioural economics is an old policy McDonald’s runs, where customers are asked if they would like to super-size their order. As it turns out, they do, more often than not.

The Australia Institute – a public policy think tank – has examined how Australians approach financial decisions. Their research found that one of the major causes of financial stress was overconfidence. The study shows again and again that when asked to rate their relative ability in relation to financial decision-making, far more people believe they are above average, both in knowledge and behaviour.

However, the study also shows that only 6% of people with mortgages entirely stick to a budget.

Have you ever made a budget, stuck to it for a few weeks, only to run off course?
Behavioural finance may soon be able to get to the heart of just why that happens.

Money is one of those essential things that humans must manage throughout our entire lives. Many Australians today are anxious about money – stressing over their current financial situations.

From the moment we enter adulthood, we step into a world where every twist and turn – from graduation to retirement – will be directly impacted by our financial knowledge and money management skills.

Events like:

  • Career decisions
  • Buying your first home
  • Investing in property
  • Getting married
  • Having children

Finances and financial knowledge play a massive role in each of these life events. It’s not just the big events finance has a say in, though; it’s also a part of our day-to-day lives.

  • Where we eat
  • What we buy
  • Where we travel

These events conceal dozens of financial decisions that dictate many facets of our lives.

According to data released by Digital Finance Analytics, close to 75% of home loan borrowers in the northern Brisbane suburbs of Carseldine, Geebung and Zillmere are experiencing mortgage stress. This is well above the national average of 40% who lack sufficient funds to pay their bills, up from an already high 33% in February before the COVID-19 pandemic was declared.

Yet, still – managing money, mortgages and personal finances isn’t taught broadly in school. Why is that?

I can think of a few reasons… but the one that stands out the most is this – personal finance is very personal. Personal finance is also an extensive topic; covering the management of financial decisions made by a person or family-based upon their budgeting, banking, insurance, mortgage/s, investments, retirement and estate planning scenarios.

That’s a lot for teachers to add to their already huge plate of curriculum subjects. Finance – encompassing the oversight, creation and study of money, banking, credit, investments, assets and liabilities that make up our financial systems – is a subject that takes years of study and devotion to understand and master.

Since individuals, businesses and government corporations all need funding to operate, the finance fields can be broken up into 3 sub-categories; personal finance, corporate finance and public finance.

Financial planning involves analysing a financial position to formulate strategies for future needs within financial constraints. Personal finances are specific to a context. For example, individuals must save for retirement, which requires saving or investing enough money during their working lives to fund their long-term plans.

What are your long term plans and financial goals?

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