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We’re raising an “invisible money-generation”

The way we view money is changing. Today’s children see us pay for purchases with a piece of plastic or a swipe of our smartphone.


When we need cash, which is increasingly rare, we head to a hole in the wall, which obligingly dispenses the folding stuff as if by magic. It’s easy to see how younger Australians can struggle to connect the dots between how much we earn and how much we spend.

Tap and woe

Already, our cashless society is having an impact.

Comparison site Finder found Millennials have the lowest credit score of any generation, and warns that many 20-somethings could spend their 30s trying to get their score into better shape in order to achieve personal goal such as buying a first home.

Parents feel the pinch

The Financial Planning Association (FPA) of Australia has dubbed children born since 2000 the “Invisible-Money Generation”. And it’s not a bad description. Kids aged under 18 have grown up in an environment where money is largely unseen, and payments are made through online transactions, credit and debit cards, and ‘tap and go’.

Research by the FPA as part of its Share the Dream Report, found that two-thirds of Australian parents believe digital money is making it harder for children to grasp the value of real money. A similar proportion of mums and dads worry that this Invisible-Money Generation will be financially worse off than their own generation.

Teaching good money skills

The good news is that parents can take some very simple steps to help their children develop sensible money habits.

Just talking to your youngsters about money is an effective starting point.  Yet the FPA’s study found that 66% of parents are reluctant to speak with their kids about money. For nearly half of these parents, their hesitance is driven by a fear that they don’t want their children to worry about money.

But the fact is, money management is a vital life skill that needs to be learned, and who better to teach it than parents? Relaxed conversations about spending, earning money, needs versus wants and a whole variety of money topics can be inspired by real life events – a trip to the supermarket, receiving birthday money, or completing chores for pocket money.

Research also confirms that children with a paid job are more digital money savvy, so it can be worth encouraging your child to take on a small, age appropriate part-time job when you feel they’re ready.

Money-smart parents are more confident

The FPA also found many parents find it challenging to pass on positive financial values to their children because they themselves don’t feel good about their financial situation.  So it’s no surprise that the FPA’s study noted that parents who partner with a financial adviser create a lasting positive legacy for their kids as well as themselves.

According to the FPA, financial advice makes parents much more confident in having frequent conversations with their children about money (61% compared to 43% of those who don’t seek the advice of a financial planner). This lays a strong foundation for the invisible-money generation to enjoy a more financially secure future.

For insights and resources that can help you teach your children much-needed money skills, contact your local Mortgage Choice Financial Adviser.

Posted in: Cashflow management

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