Why the money stories you teach your children could impact the rest of their lives

The Japanese Maneki-Neko cat is often seen in Asian businesses. Called the welcoming cat, waving cat, happy cat, lucky cat or money cat, this figurine is believed to attract good luck and fortune for its owners. This belief is passed down through the generations.  

While you might not believe a cat trinket will bring an abundance of money into your life, you are harbouring your own money stories that your children are likely to follow. Your children are exposed to your money beliefs and habits, and they witness your financial struggles. All of it leaves a lasting mark on their lives.

Perhaps you’re telling yourself one of the money stories below. If so, they could potentially have a negative affect your child’s outlook on money.


Money story 1: If I had more money, my life would be better

In theory, that sounds logical. If you earn more money, you could pay off your debt, buy whatever you want and take more holidays.

But more money doesn’t solve our problems. In fact, it can make them worse. That’s because when people earn more, they often raise their expenses as well – sometimes by an even greater amount. So they can actually end up with more debt and financial stress.

What matters is not how much we earn, but how much we save and invest. That's why the power of compounding is an important investing lesson to teach your kids. 


Money story 2: Debt is inevitable

It’s true that most people need to incur debt at some point during their life, but debt doesn’t have to take over your life. Most parents are unaware that their debt story is affecting their kids. Debt places a lot of strain on parents, and kids pick up on it.

A study from the University of Wisconsin-Madison found that children whose parents had high amounts of credit card and medical debt experienced a decline in their wellbeing.

As these children become adults, they may follow the same approach to debt as their parents.

That’s why you should teach your kids two important principles about debt:

  1. Minimise ‘bad’ debt, such as credit cards, payday loans and personal loans, because they attract the highest interest rates and are used to buy depreciating assets.

  2. Educate them about the benefits of ‘good’ debt, such as student loans, home loans and business loans, which are used to buy things that often deliver a return on investment.


Money story 3: I don’t have money to save

If all your money goes to paying bills, saving can be hard … but not impossible.

Saving is an important lesson to teach your kids, because you don’t want them to live paycheque to paycheque with no savings.  

Even when money is tight, try to save even a small amount every month to build a savings buffer. This teaches kids that saving money, even small amounts, is a good financial habit.

With the FLX App kids can easily track, spend and save money. They can also set specific savings goals. When kids learn to save money from a young age, it’s a habit they carry through to adulthood.


The FLX App is a great tool to support positive money management skills in kids. You can get a FLX account set up here.

This is general advice. Read the PDSs & TMDs at www.flexischools.com.au/legal before deciding if FLX is right for you. The FLX Services & Flexischools are provided by InLoop Pty Ltd ABN 27 114 508 771 AFSL 471558 (trading as Flexischools). The FLX Prepaid Mastercard is issued by EML Payment Solutions Limited ABN 30 131 436 532 AFSL 404131 pursuant to license by Mastercard Asia/Pacific Pte. Ltd.


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