Raising your kids to be smart with money gives them a vital life skill.

As a parent, you have the power to shape your child's relationship with money. Start early by showing them where money comes from, how to budget, how to spend wisely and how to set savings goals.

Talk to your kids about money

You don't need to be an expert to teach kids about money. Just start a conversation about money when the opportunity comes up at home or when you're out.

Your kids will naturally ask you for the things they want. It's hard when you have to say no. Talk about how we all have limited money and we need to carefully decide what we spend it on.

How you earn money

Talk about how you earn the money you spend. Explain that you get a certain amount of money each time you get paid and how that money is used to cover the essentials, like food, clothes and housing.

Needs versus wants

Talk about how you choose what's the most important things to spend your money on. Discuss the difference between 'needs' and 'wants', and encourage your kids to think about these before spending their money.

When older kids get their first job, they're often tempted to spend all their money at once. Show them how to track their spending to see where all their money is going.

Show your kids where money goes

Use everyday situations to teach your kids about money, including where it comes from and where it goes.

When you tap and pay

Explain that when you tap your card, it talks to your bank who has your money in your bank account. When you tap to pay it uses money that you've made by working and saving. Each time you tap and pay, you have less money in your account.

While shopping

While shopping, teach your kids how much things cost by showing them:

• different prices for similar items
• how to compare deals
• how to work out which items are better value
• how to work out price differences and discounts

When paying bills

Show your kids an electricity bill or a phone bill. Explain how many hours or days you had to work to pay that bill.

This will help them start to see the connection between work and the cost of things.

Get kids involved in money decisions

As your kids get older, get them involved in budgeting, saving and spending.

Check deals

Work with your kids to research online or shop around to find the best value for something they want.

Plan an event

Involve your kids in planning and budgeting for an outing or a birthday party. Work through all the costs with them, including transport, food or tickets.

Do a budget

Do the family budget with your kids. Explain how much money you have each week and how it’s spent. They'll start to get a sense of the cost of living and how long it takes to save.

If they earn some of their own money, help them create their own budget.

Share their money

Encourage your kids to donate some of their savings to charity. This teaches them that money can be used to help people and is not just for buying things.

Give kids pocket money

Pocket money can help children to understand the value of money. You can choose to pay them for certain tasks, for example:

• mowing the lawn
• vacuuming the house
• washing the car
• taking the rubbish out
• cooking dinner or making school lunches
• hanging out and bringing in the washing
• packing and unpacking the dishwasher
• walking the dog

Make sure you withhold or reduce their pocket money if the tasks are not done or not done properly. This helps to teach kids that they only get paid when work has been done to a certain standard.

Encourage your kids to save

Learning to save is a vital money lesson.

Piggy banks and bank accounts

Piggy banks are great for younger kids. They can see the money they’re putting away and watch it grow as they save.

Opening a savings account is a good way to introduce kids to banking, saving and interest.

Set money goals

Help your kids avoid impulsive purchases by teaching them to set goals and to prioritise what they spend their money on.

When your child wants to spend money on an impulse purchase, remind them about the goal they are saving for. Work out how much longer they'll have to wait to reach their goal if they decide to spend today.