Money habits form young

Research from the University of Cambridge, carried out for the UK's Money Advice Service, found that many of our core money habits (e.g. recognising value, understanding that money is earned, being able to plan ahead) are formed by around age seven(3). 

Formal lessons don't do much good at that age. What sticks is what kids see and experience: watching you compare prices, save for something or explain a decision out loud.

Interestingly, researchers at Brigham Young University have found that how openly parents talk about money matters just as much as what they actually know.(4) 

Start with the “why”

When talking about insurance, forget the policies, premiums and jargon. Young children probably don't need any of it. 

Start with the purpose behind it instead: preparing for, and protecting against, life’s unexpected curveballs.

You could say something like this: 

“We wear bike helmets because we can't stop accidents from happening, but we can protect ourselves if they do. Insurance works in a similar way. It helps protect us financially when life doesn't go to plan.”

That one idea – preparing for the unexpected – is the seed of financial literacy. It’s the thinking behind insurance but also emergency funds, or saving before spending. 

Make it part of the bigger money picture

Insurance doesn't have to sit off to one side as some strange, separate topic. It may make a lot more sense to a child once it's woven into the rest of the money story.

For example, when your teenager gets their first pay cheque, that’s a natural moment to talk about how adults budget for insurance alongside rent/mortgage payments, groceries and savings.

Worth keeping in mind: young Kiwis will be taught about insurance at school under the new curriculum, alongside investment, interest and tax. So talking about it at home is simply reinforcing the concept, not introducing a new one. 

Keep the conversation age-appropriate

Meet your children where they are. The conversation can then build as they grow. 

Younger children might simply learn that insurance helps protect families when unexpected things happen. Teenagers, on the other hand, may be ready to grasp ideas like paying premiums, managing financial risks and protecting future income. 

For older teenagers learning to drive, discussions about car insurance can also help explain how people protect themselves financially against unexpected costs.

Lead by example

As we’ve mentioned, children often learn more from what we do than what we say.

Reviewing your insurance, talking openly about your household’s financial decisions and explaining the reasoning behind them can all help normalise those conversations (keeping this age-appropriate). It also shows that planning ahead is part of looking after yourself and the people you love. 

By sharing the “why” behind those choices, you’re showing that financial wellbeing isn’t just about earning money but being able to enjoy life responsibly. Over time, those examples can help build confidence and positive money habits.

Use the free tools out there

You don’t need to build your money lessons from scratch. Sorted, run by Te Ara Ahunga Ora (the Retirement Commission), has free tools New Zealand families can use together. 

Plenty of schools also use Banqer, a Kiwi-built classroom simulation where students earn, save and spend in a pretend economy. 

Some of the major banks run their own free programmes too. ASB's GetWise delivers workshops in schools nationwide, with helpful resources for parents to dive in at home. BNZ backs Bamzonia, an online game where kids earn credits and rebuild their own Pacific island. Worth asking your child’s school which ones they already use.

Small conversations, big difference

Financial literacy is a habit. Practised daily, built over years through small conversations about earning, saving, spending and yes, protecting what you’ve worked for. 

Introduce these concepts early and you’re setting your children up with a healthy relationship with money for life. 

Sources:

1. Sorted.org.nz – Financial education arrives in NZ schools: what money skills will your child learn in 2026?
2. Beehive.govt.nz – Transforming financial education in schools
3. Money Advice Service – Press release (23 May 2013)
4. SageJournals – Research (2020): Can we talk about money? Financial socialisation through parent–child financial discussion

Disclaimer: Please note that the content provided in this article is intended as an overview and as general information only. While care is taken to ensure accuracy and reliability, the information provided is subject to continuous change and may not reflect current development or address your situation. Before making any decisions based on the information provided in this article, please use your discretion and seek financial advice.

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