Tools to help your 5–6-year-old kids to be cash clever

At this stage, it's all about the basics. What's the difference between a need and a want? How do we earn money? These questions will help your child build a strong foundation for some cash clever habits when they're older.


Using pocket money as a learning tool

Giving your child pocket money is a great way to start their education on managing money. Consider setting it up as a reward for doing extra chores or tasks. It can show your child the importance of earning money, rather than having it handed to them.

How much you give, when you give it, or even whether you give it at all depends on your own preferences.

Check out our blog for more pocket money tips.

Other alternatives to pocket money

It's ok not to give your child pocket money. If you still want to teach them the value of spending, saving and sharing, why not create a point system?

Points could be swapped for things like TV time, computer time or other treats your kids enjoy. They could save their points and even trade them with their siblings for favours, and learn the basic concepts of "spend, save and share".

Consider thinking about dividing chores into paid jobs vs family jobs. A family job might be something like making their bed, or setting the table, which your child is expected to do normally. A paid job, which earns pocket money, could be something a parent would normally do, like washing the car or folding laundry.

Use our helpful resources to make pocket money fun.


Spend, save or share?

When you give your child their pocket money or points, talk about what they plan to do with it. Do they want to spend it on something or save it for later? Perhaps someone close to them has a birthday coming up, or they're simply feeling generous. Whatever it is, talking to your child helps them think about their money choices. Making conscious decisions is the first step towards controlling your spending.

Does your child know how much things cost?

At this age children don't really know what things cost, especially big ticket items like a house. $100 seems like all the money in the world. Ask what they think items cost, and start a conversation with them about the real value of things.

A good way to teach children to think about what they want to do with their money is using "spend, save and share" jars. They can split their pocket money before spending it. Plus counting up the money in each jar is fun too, and it shows how savings can build up over time.

Take a look at our helpful resources to make your own.


What should your child be buying at this age?

Spending pocket money helps children learn about buying things. It's OK to let them make a few mistakes, and have regrets over buying something they don't really want or need. Talk to them about it when it happens. See if they can come to their own conclusions about what they want to do with their money.

It's also OK to put some rules around their spending. For example, if you're concerned about their teeth or health, you might limit how much they can spend on sugary treats.

Every child and every family is different, and as a parent you know best when it comes to what your child needs.

Take a look at our helpful Needs vs wants game in the resources.

Resources for you and your 5–6-year-old

Help your child learn about financial literacy at home with our fun resources.

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