Why It’s Essential to Teach Your Kids About Money and Investing

Glenn Broadbent • December 3, 2025

Teach Your Kids About Money and Investing: Why It’s Essential

Woman and two children focused on paperwork at a table, lit by sunlight.

Money influences almost every part of our daily lives—how we live, what choices we make, and the opportunities we can access. Yet despite its importance, many young people grow up without understanding how money actually works. They leave school knowing calculus and Shakespeare… but not how to budget, invest, avoid debt, or build long-term financial security.

Financial literacy isn’t just a “useful extra”—it’s a life skill as critical as reading or writing.

Teaching kids about money and investing early gives them something incredibly valuable: confidence. When children understand money, they don’t fear it. They don’t see it as something mysterious or stressful. Instead, they view it as a tool—something they can control and use to shape their future.

Without this education, they’re far more likely to stumble into the same financial pitfalls that many adults face today.

1. Without Money Education, Young People Face Real Risks

Every day, teenagers and young adults are bombarded with “buy now, worry later” messages. Easy credit, Afterpay, online shopping, and subscription apps encourage fast spending and instant gratification. Without the right knowledge, kids can easily fall into:

➡ Debt traps

Credit cards, personal loans, buy-now-pay-later services, and even HECS debt can become overwhelming. A financially uneducated teen may see borrowed money as “free money,” not understanding the long-term consequences of interest and repayments.

➡ Missed savings opportunities

Most young people have no idea how compound interest works—or how incredibly powerful it can be when started early. A child who learns to save $20 a week from their first part-time job could set themselves up for a stronger financial future than someone who doesn’t start saving until their 30s.

➡ Struggles in adult life

Financial stress is one of the biggest causes of anxiety, relationship conflict, and poor mental health. Teaching kids how to manage money early helps them avoid many of these challenges, giving them the tools to cope, plan, and thrive as adults.

2. Early Money Lessons Build Strong Life Skills

Teaching kids about money isn’t just about dollars—it’s about developing traits that benefit them for life:

✔ Responsibility

Kids quickly learn that money is earned, not simply given. This reinforces effort, discipline, and ownership over their choices.

✔ Patience and delayed gratification

When a child saves for something they really want, they’re building the foundation of long-term thinking—an essential skill for investing.

✔ Decision-making

Kids learn to compare options, understand value, and weigh outcomes. This teaches them how to make smart decisions, not just with money, but in every part of life.

✔ Confidence and independence

Financial education empowers kids to stand on their own feet. Instead of allowing money to control them, they grow up knowing how to control money.

3. Kids Who Learn About Investing Build Wealth Earlier—and Easier

One of the greatest financial advantages anyone can have is time. The earlier you start investing, the more compound interest works its magic. This is why financial education for kids and teens is so powerful: they have decades ahead of them.

What kids learn when they’re taught about investing:

Money can grow while they sleep
Compounding turns small amounts into large amounts over time
Investing is not “risky gambling,” but a long-term strategy
Wealth isn’t about luck—it’s about habits

Kids who understand investing don’t fear the stock market—they understand it. They don’t see it as something “for adults” or “too complicated.” Instead, they recognise it as the pathway to financial freedom.

4. Teaching Kids About Money Helps Break the Cycle

Many adults today struggle with money because they were never taught how to handle it. Children often copy what they see at home. If money is a stressful, secret, or confusing topic for parents, their kids pick up the same relationship with it.

But education breaks the cycle.

When families talk openly about money, budgeting, investing, and financial goals, kids grow up with a healthier, more empowered mindset.

They learn:

How to avoid emotional spending
How to save for short-term and long-term goals
How to use money as a tool for choice, not for stress
How to plan a future rather than react to problems

This creates financially confident adults who can build stability, protect themselves from hardship, and pursue opportunities boldly.

5. Money Education Prepares Kids for the Real World

Schools teach algebra, photosynthesis, and ancient history… but not how to pay bills, build credit, choose a super fund, or invest in ETFs.

Kids leave school unprepared for real financial responsibilities like:

Renting an apartment
Managing income from a job
Paying taxes
Understanding interest rates
Buying a car
Saving for a home
Planning for retirement

Financial education fills this gap. It ensures kids aren’t learning through mistakes—mistakes that can cost thousands of dollars and years of stress. Instead, they step into adulthood with clarity, confidence, and a plan.

6. Teaching Kids About Money Creates Opportunity

When kids understand money, they unlock opportunities that many never experience:

Starting a small business or side hustle
Investing early and watching wealth grow
Making smart career choices
Travelling, studying, or buying a home without crippling debt
Achieving financial freedom earlier in life

Money becomes something that works for them, not something they’re constantly chasing.

Financial literacy isn’t about being “rich”—it’s about creating a life with options.

7. The Role of Parents and Families Is More Important Than Ever

Kids don’t need to be financial experts.

They just need guidance, stories, examples, and simple systems that make money understandable. Parents can start small:

Use pocket money or chores to teach earning
Introduce the Three-Jar System: Spend, Save, Give
Show how compound interest works
Talk about budgeting in everyday life
Explain the difference between needs and wants
When they’re older, introduce investing basics

Children learn fastest through real-life experiences and consistent conversations—not lectures. When money becomes a normal, open topic, kids flourish.

8. The Bottom Line: Financial Education Is a Gift

Teaching kids about money and investing isn’t about creating financial geniuses—it’s about giving them a strong foundation. A child who understands money won’t fear it or misuse it. They’ll make smarter decisions, avoid unnecessary debt, and build a future that aligns with their values and goals.

Without financial education, young people risk: