Kids and Money: 5 Common Myths Busted


All parents are teachers. We help our kids learn how to walk, ride a bike, how to swim. We teach them about the importance of sharing, kindness, and hard work. We introduce them to new things every day, like colours, toys, ice cream, rain, books, dancing, laughter... (the list goes on).

And yet, one thing that doesn’t always make it to our list of the million things we’ll teach our kids about is money.

Money is something many parents think kids don’t need to know about. Not when they’re young, anyway. It’s boring, complex, a grown-up thing. But kids are already learning about money just by watching us. They see us spend it and hear us talking (and stressing) about it. They understand the transaction of exchanging money for something they want. They watch us tap our cards and see money coming from ATMs. However, without context and proper guidance, their understanding may be limited. 

Here are five common myths and misconceptions about kids and money debunked by research and fact. And why it’s essential to add money to our ‘teaching’ list.

Myth 1: Kids are too young to understand money

Truth: Research1 shows that children as young as 4-5 years of age can grasp basic financial concepts like saving, spending, and earning through age-appropriate activities and conversations. According to Dr David Whitebread, a developmental psychologist at the University of Cambridge, the earlier children start financial education, the better2. A child’s understanding of money is a complex developmental process that evolves as they grow and gain more experience with financial transactions. 

Why Spriggy is a great way for kids to learn about money.

Myth 2: Money is too complicated for children

Truth: Yes, money can be complex, but there are so many ways that financial concepts can be simplified and made age-appropriate for children3. Starting with simple concepts like saving and spending helps lay the groundwork for a deeper understanding of finances as children grow older2, and these can graduate to more complex topics as kids grow older. 

Starting financial education when kids are young can give them a head start on developing money management skills. Waiting until they are older may limit their understanding and make it more difficult for them to make informed decisions.

Myth 3: Schools will teach them everything about money

Truth: Kids do learn some things about money in school, such as maths and numeracy. They may also pick up some basic theory. But it’s not nearly enough to teach them the important habits and skills they need to navigate life. In fact, 67% of parents we surveyed4 believe that school doesn’t do nearly enough to teach kids about money. So it’s up to us parents to provide them with the practical experience and guidance they need to master money.

Why school isn’t enough to teach kids about money.

Myth 4: Only adults should handle money decisions

Truth: Research conducted by the University of Arizona5 found that children who practised making small financial decisions were better prepared for financial challenges later in life. 

Give kids an allowance and let them choose how to spend or save it. With a little bit of guidance, of course. Letting them decide whether to spend on lollies today or save for a special edition game next month helps them learn about financial consequences and decision-making. 

Myth 5: Talking about money is taboo

Truth:  Openly discussing money matters can help children understand the value of money and develop healthy financial habits. Allow them to get involved in the family budget, help them understand why you buy some things but save for others, and discuss money concerns in a way that makes sense to them. Avoiding the topic may lead to confusion or misconceptions. 

Financial education shouldn’t be put off. Giving kids strong foundations in money management can make all the difference to how they navigate their finances in the future. And as parents, it’s our responsibility to teach them, guide them, and give them the tools, opportunities and practical experience they need to be great with money. 


1. Clancy, M., Carson, J., & Davis, E. E. (2018). When do children understand money? Journal of Economic Psychology, 67, 124–141. doi: 10.1016/j.joep.2018.05.004
2. Whitebread, D., & Bingham, S. (2013). Habit Formation and Learning in Young Children. Money Advice Service.
3. National Endowment for Financial Education (NEFE). (2018). Teaching Personal Finance: A Guidebook for Teaching Money Management Skills.
4. Spriggy member survey 2022
5. Serido, J., Shim, S., & Tang, C. (2013). A developmental model of financial capability: A framework for promoting a successful transition to adulthood. International Journal of Behavioral Development, 37(4), 287-297.

The information in this post is provided for general information only. The information does not take into consideration your or anyone else’s objectives, needs or financial situation and does not constitute financial advice or a recommendation of any kind. Before acting on any information consider its appropriateness and, where appropriate, seek professional advice. Although every effort has been made to verify the accuracy of the information as at the date of publication, Spriggy its officers, employees and agents disclaim all liability (except for any liability which by law cannot be excluded), for any error, inaccuracy, or omission from the information for any reason, including due to the passage of time, or any loss or damage suffered by any person directly or indirectly through relying on this information.

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