Financial education for children is a gift that will see them in good stead for the rest of their lives.
As a responsible parent/ adult, mindful of your goal to provide financial independence for yourself and for your family –
- you have established a financial planning strategy;
- you have accumulated financial wealth;
- you have a well-considered ‘estate plan’; and
- to the extent necessary, supported this with life insurances –
how well prepared are your beneficiaries to deal with the financial store you have provided for them?
For quite some time now we have been beating a drum for improved financial education in Australia. A positive contribution on our part has been to prepare articles on a range of financial and wealth management topics. We publish them on a variety of sites always starting with our website.
There are a number of reasons driving our passion for this subject. It is important that the ‘beneficiary generation(s)’ are skilled to manage the wealth that flows to them. Substantial wealth from –
- superannuation accounts,
- insurance policies,
- other investments, and
- personal assets from their parents and other benefactors are likely to transfer in the coming years.
(We are mindful that the role as financial mentor is a responsibility of the extended family or network. Sometimes family-associated adults mentor –
- financial literacy to children and
- other prospective beneficiaries
- who may not necessarily be in their immediate household.)
Prime financial education starts in younger years
Financial education of younger children can be a ‘touchy’ subject –
- especially when their peers are allowed more financial freedom than you consider appropriate for your family
- – always stay mindful that what your children learn from you may well be as much from
- their observation of what they see you doing (how you react when an unexpected windfall – or expense – presents itself;
- how you verbalise your decision-making process in any financial commitments; etc),
- as they will from what you try to ‘teach them’.
Bearing this in mind, judicially engaging them in decision-making processes you engage in making financial decisions. This engagement will benefit their development and better prepare them for a future with financial literacy. It will heighten their financial awareness, and hopefully, their financial independence.
…but continuing education reinforces the learning
As your children age and are making their own decisions regarding financial matters –
- those lessons you gave them will equip them to be responsible with their money,
- to understand goal setting,
- to recognise that saving, investing and financial wellbeing
all contribute to a satisfying lifestyle.
Financial literacy is improving in the community, thanks to the work of government agencies such as MoneySmart. The education system itself (particularly in secondary and tertiary courses) is contributing to this awareness. The interaction between clients and their financial planners, contributes to this growing wealth management awareness.
Budgeting and the responsible use of money are important skills to learn for all of us. A client has shared that their pre-teen child had developed a more respectful approach to money (and spending) after starting some part-time work. She sat down and calculated how many hours of work it took to be able to spend a day at a theme park! This is a great start to that child’s learning about financial wellbeing – one of those lightbulb moments.
(We would love to hear stories from your experiences in teaching your children to prudentially deal with money they receive – whether by way of wages; from gifts; or even pocket-money. Please alert us to your experience by sending a short précis of the situation through our website Contact Us facility – we will contact you for any further detail that is needed to include the idea in a future Blog.)
Financial education for you
Part of the experience for clients engaging our financial advisers is to have their financial strategy, their investment assets and their investment philosophy carefully explained to them so that they better understand the reasons for the investments being made, the risks inherent in them, the situations they are likely to encounter – and to confidently sleep at night, knowing that everything is ‘under control’. Being able to pass this experience on to family members – those potential beneficiaries of all their hard work – is also a point of value.
We welcome enquiry from new or prospective clients, including from members of families of existing clients and look forward to helping you on your financial journey. To make an appointment with one of our experienced advisers –
- phone our office, on 07-3421 3456, or
- at your convenience, use the linked Book A Meeting facility.
(This article was first posted by us in February 2012. It has been occasionally refreshed/updated, most recently in June 2025.)
