Topic 5: Habits - Spending Less Than You Earn

Early primary school age kids first need to learn the value of the individual coins and notes that are in circulation before they can learn about economising.

Until they become aware of counting numbers and they understand that 20 is more than 10 and 100 is more than 50 you can’t teach them much about the value of money or Spending Less Than You Earn. Perhaps you might start by teaching them the order of value of the different coins and notes (and that the colour is not an influencing factor in the value).

Perhaps you might start by teaching them the order of value of the different coins and notes (and that the colour is not an influencing factor in the value).

As a parent you can help by:

  • Getting your kids into the habit of banking some money every week right from when they are young. This might be via school banking if that is available to them, or using piggy banks to physically save money, and then taking them to the bank to deposit it every time the Piggy Bank is full. Some commentators recommend the use of a clear container for savings so the kids can see the money accumulating. This may well be good advice!
  • Showing your kids how you have a habit of automatically saving money each pay and the benefits of that habit (discussed in Chapter 3 – Flow).
  • Let your kids see the systems you have in place that are based on habits that ensure you do not spend more than you earn.
  • Create a Spending Plan and let your kids see that you regularly check on that plan so they can see the benefits of getting into the habit of planning their spending and following the plan.
  • Including the entire family in a plan to achieve a goal by regularly putting money aside for that goal, e.g. a Cruise Holiday. Create a system that lets everyone see the savings target being reached, maybe via a money thermometer on the fridge door, and get everyone involved in the excitement.

By the time your kids reach adulthood they should:

  • Already have money in savings
  • Already have a savings habit and are looking forward to saving some of their income every payday. Having a savings goal and a goal for that savings is a huge help here. When you have a goal to do or buy something you really want, saving for that goal is much more attractive.
  • Understand that to a large extent, habits and goals create a positive direction for their life and their finances so they should be very deliberate about the habits they create and the goals they set.
  • Understand that it is a really good practice to review their habits and goals at least twice a year. Sitting down with a partner, a parent, or an adviser and reviewing goals will be one of the best habits they ever create!
The best things in life and the worst things in life are usually the outcome of a gradual and slow journey or process. It takes time, and in either case, the journey becomes easier and easier, regardless of whether the direction is positive or negative.

For example, almost nobody becomes wealthy in one day and nobody becomes a drug addict in one day. A goal and/or a habit is often at the beginning of a wealth journey, and a lack of goals and habits leaves the door wide open for the journey to drug addiction.

Lower Primary School Years:


Upper Primary School Years:


Lower High School Years:


Upper High School Years:


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