Financial literacy is one of the most valuable gifts we can give to the next generation. Helping a teen manage their part-time job income as they navigate not spending it all, along with smart saving, and guiding adult children towards bigger savings goals, such as a house, is essential for helping them grow their future.
Just as you teach life skills like cooking or driving, educating children or grandchildren to help them become financially confident will ensure they thrive in an increasingly fast-paced and expensive world.
As children grow into teenagers and young adults, conversations around money are essential. Here are a few strategies to consider for each life stage:
Teenagers
Introduce them to the concept of budgeting by helping them plan their spending and saving patterns from a part-time job or allowance. They will be tech savvy, and having them download a budgeting app will be second nature to them. However, the good habits around using the apps and being smart with their money will come from you. Encourage saving for meaningful goals, such as a gadget they’ve had their eye on, or consider placing them in charge of their prepay phone and clothes through their allowance. This is a good way to help them learn the value of money in a digital world. Guide them to make wise decisions but allow them the space to make mistakes and learn from them.
As apps will be second nature for most teens, have them download and use one to track their spending and saving. Consider mybudgetpal or Goodbudget, which has a free basic plan, or Stash, which the whole family can use for a small monthly fee.
Young Adults
For those heading off to university or starting their first job, guide them through the basics of managing income and the concept of paying themselves first. This is about paying yourself before you start spending by setting aside money for the necessary expenses such as rent, food and bills, then some toward an emergency fund. What is left over can be spending money. Discuss credit cards, good and bad debt, including layby, hire purchase, etc and how to avoid common financial pitfalls.
Discuss long-term planning, such as contributing to a retirement fund early on. Share useful tools and resources, such as Sorted.org.nz for budgeting and retirement planning or PocketSmith for managing day-to-day expenses and future goals. Encourage them to explore starting a KiwiSaver journey early to maximise employer contributions and government incentives. Many banks also offer helpful financial planning tools and apps tailored to young adults.
Grandchildren
Teaching younger children about money can be effective when it comes from a grandparent. Give younger grandchildren small saving challenges, and if you can, show them how they can earn money by completing tasks or projects. For older grandchildren, talk about investments and help them to open their first savings accounts, turning it into an occasion so they see it as something special.
You can also use interactive methods, such as games or challenges. A simple share market simulation can teach older kids about investments. At the same time, younger children might enjoy learning through hands-on activities, like starting a dog-walking or window-washing enterprise for people they know.
Introduce real-life scenarios
To be a good role model for financial literacy doesn’t mean having all the answers. It is about demonstrating and practising positive habits and fostering open discussions about money.
Do share your own experiences, both good and the mistakes. For example, explain how you saved for an important-to-you purchase and how you have had to manage financial setbacks. It is a good idea to keep the conversations light but informative. Over time, they will learn and understand that financial management is a lifelong process. They will still make mistakes with money, but the goal is for them to make minor ones.
Don’t use money as a form of control or a reward system tied to behaviour. Instead, focus on educating them about the value of earning and saving.
Do encourage curiosity and questions about money. Engaging their interest can spark lifelong learning, whether it’s about how much something costs, comparing purchase options, or how investments work. Remember that it is OK for them to question the cost and ‘why’.
Don’t shield them entirely from financial realities. Age-appropriate transparency builds understanding and trust.
One of the best ways to build financial independence is through practical experience. Remember the old saying, “You can’t wrap your children in cotton wool”, so do not be afraid to let them fail. Instead, help them to focus on what they have learnt.
Co-parenting and financial literacy
When parents are separated, teaching financial literacy requires communication and consistency between households. Both parents can model good money habits by aligning on core financial values and ensuring children experience consistency in the messaging they receive about money.
For instance, parents can agree on approaches to allowances, savings, and spending and avoid using money to compete with or undermine one another.
Children benefit from understanding the importance of budgeting, planning, and saving as a unified act, even if financial circumstances differ between households. Open, respectful communication between parents can set a strong foundation for children to learn and grow.
The role of technology in financial education
Technology has revolutionised how we track and learn to use money. Digital tools such as budgeting apps and investment platforms will make financial literacy more engaging and accessible. Have them download apps that help track spending, encourage saving, or introduce investment concepts. Consider Acorns or MoneyHub, which simplify saving and investing.
Charity and philanthropy
Teaching the value of giving back can inspire a more balanced approach. For example, you can encourage children to donate part of their income or allowance to a cause they cause or participate in charity events as a family to demonstrate the impact of giving time. By doing so, you’re helping them see a future where they can make a positive impact.
Building long-term financial resilience
The habits instilled early on will shape how your children and grandchildren approach money. By equipping them with knowledge and encouraging independence, you are helping to create a future where they can confidently handle financial challenges and opportunities.
Talk to them about being a spender or a saver and the path that each trait could lead them down. Also, talk about how debt can be good, such as saving toward their education, a house, and investing for retirement. These conversations help them connect daily money habits to broader life aspirations.
Financial literacy isn’t a single lesson—it’s a continuous conversation. By helping your children or grandchildren learn to manage money, you’re instilling good habits while building their confidence, independence, and resilience. Take the time to lead by example, share your knowledge, and create a lasting legacy they’ll carry with them for life.
Every generation has encountered financial stress driven by circumstances beyond its control. Think back to the discussions about wartime resourcefulness, when thriftiness and careful planning weren’t choices but necessities. Those lessons remain just as relevant today, in a world where tapping a card can feel effortless until the bill arrives. Sharing these lessons can help younger family members understand the value of balancing caution with today’s financial opportunities.
Here are some practical tips for parents and grandparents with different money personalities to set good examples for their children and grandchildren:
The Saver
Characteristics – values saving over spending, cautious with money.
How you can educate
Demonstrate the importance of budgeting and saving regularly.
Share stories about how saving has helped in emergencies or achieving goals.
Encourage children to set aside a portion of their allowance or earnings for savings.
Use savings apps or tools to track progress and celebrate milestones.
The Spender
Characteristics – Enjoys spending money and is often impulsive.
How you can educate
- Teach the importance of budgeting to balance spending and saving.
- Set limits on discretionary spending and stick to them.
- Discuss the consequences of overspending and the benefits of mindful spending.
- Encourage setting financial goals to prioritise spending on meaningful items.
The Shopper
Characteristics – finds joy in shopping, may use it as a form of therapy.
What you can do
- Emphasise the importance of mindful shopping and avoiding impulse purchases.
- Create a shopping list and stick to it to avoid unnecessary spending.
- Discuss the difference between needs and wants.
- Encourage setting a budget for shopping and tracking expenses.
The Debtor
Characteristics – often in debt, may struggle with managing finances.
What you can do
- Emphasise the importance of living within one’s means.
- Teach strategies for managing and reducing debt, such as creating a repayment plan.
- Discuss the impact of interest rates and the benefits of paying off debt early.
- Encourage open discussions about financial challenges and seeking help when needed.
The Investor
Characteristics – focuses on growing wealth through investments.
What you can do
- Explain the basics of investing and the importance of starting early.
- Share personal investment experiences, both successes and lessons learned.
- Encourage children to learn about different investment options and risks.
- Use simulation tools or games to teach investment strategies.
The Giver
Characteristics – generous with money, prioritises helping others.
What you can do
- Teach the importance of balancing generosity with personal financial stability.
- Encourage setting aside a portion of income for charitable giving.
- Share stories about the impact of giving and how it can be done responsibly.
- Discuss the benefits of creating a giving plan to ensure sustainable generosity.
This is in no way intended to be financial advice and so should not be construed as such. Readers should satisfy themselves as to what product(s) might be useful to them, and seek independent financial advice from a qualified professional before making savings or investment decisions.
Checklist for teaching financial literacy
- Introduce age-appropriate money management tools.
- Demonstrate good financial habits, like budgeting and saving.
- Involve children in discussions about family expenses – this could be made fun by everyone needing to vote or choose between ‘this or that’.
- Encourage questions and curiosity about investments.
- Promote the importance of giving back.
Quick tips
Checklist for parents and grandparents
- Lead by example and discuss money openly during family gatherings.
- Use budgeting apps to track spending habits.
- Set saving challenges.
- Share stories about financial successes and mistakes.
- Encourage long-term planning, such as saving for something they want and growing their goals towards positive investments such as their education or a first home.
Bridgette Jackson is a CDC-certified Divorce/Separation Coach with a postgraduate dispute resolution qualification. She is also a trained divorce mediator (AIMNZ), a Relationship Coach (Institute for Life Coach Training), and a member of the Institute of Executive Coaching and Leadership (accredited by the ICF – International Coaching Federation). Bridgette is also a Certified Organisational Coach, Level One with IECL (Institute of Executive and Leadership Coaching) and an enrolled barrister and solicitor of the High Court of New Zealand.
