CommBank study finds kids build more money skills than mum, dad

Rising living costs and new technologies are prompting parents and children to act differently around money. Here’s how.

Children in Australia are on track to become better money managers than their parents, new research suggests.

A study of more than 4200 households by The Commonwealth Bank has found that eight out of 10 families talk about money at home, 87 per cent of children buy things with their own money and 59 per cent earn money of their own.

Two-thirds of children apply spending strategies such as waiting for sales, shopping around and recognising wants versus needs, according to the Australian Money Matters Report released by CommBank kids’ money app Kit.

Kit managing director Yish Koh said the results suggested parents were beginning to understand the importance of teaching financial literacy, and that future generations were better equipped to manage money.

Money app Kit managing director Yish Koh says children are dealing with money digitally.

“We are transitioning to a cashless society which makes it more difficult in some respects,” she said.

“The silver lining is we now have digital services allowing kids to interact digitally with their money. Kids are very digitally-savvy and are dealing with in-game currencies.”

Ms Koh said today’s Generation X and Y parents did not have as much access to financial knowledge and technology such as apps and websites when they were younger.

“They want to avoid their kids making the same financial mistakes they did,” she said.

“The rise of gamification and easier access to digital payments has also led to concern for parents, meaning they may have reached a tipping point and are prioritising their kids being savvy with money.”

Financial literacy and wellbeing advocate Lel Smits, from the Australian Shareholders’ Association, said parents were increasingly aware of the importance of teaching good money habits.

“While the rise of digital payments, gaming purchases, and tap-and-go transactions may be contributing factors, there are other reasons as well,” Ms Smits said.

These included increased financial complexity and the current economic uncertainty facing families, she said.

Financial literacy advocate Lel Smits with her daughter Madeline Maddern. Picture: Supplied

“Financial literacy education in schools is not yet universal, and the quality and depth of the education provided can vary greatly,” Ms Smits said.

“Parents still play a crucial role in teaching their children about money management. Children often learn about money through observation and discussion. Parents can also help children develop good financial habits by setting an example.”

Ms Smits said stronger money skills among children would lead to increased economic stability, lower loan defaults and less financial hardship.

Kit’s Ms Koh said the biggest benefit of children becoming better with money was Australians overall becoming happier and healthier, with less stress.

“If we can get this right, it will have a huge impact on people’s lives,” she said.

Originally published as CommBank study finds kids build more money skills than mum, dad