The money tips I wish I taught my children when they were young


We live in uncertain times.

We are seeing the financial and economic fallout from the COVID-19 pandemic, there are droughts, floods and fires, and increasing political uncertainty.

Amid all this, we must go about our business and live our lives.

And to do that we must feel comfortable in our long-term financial situation.

Money Children

Being able to handle money and finances is not innate.

We are not born with the skills to make our family budget add up at the end of the month.

We have to be taught these money-making skills and habits.

In my book with co-author Tom Corley, Rich Habits Poor Habits we call them our “rich habits” and I think they are among the most important education a person can have.

Having made a career from helping people better understand their investments and grow them, there are learnings that stand out for me.

I had to learn the hard way and this had made those messages even more clear to me.

But when I was busy working, investing and growing our family wealth that was my main focus.

Only now, when I look back at the years that have passed, do I realise these were the critical lessons for my children when they were growing up, so they could have entered adult life safe and secure in the knowledge and skills of Rich Habits.

From the time they can count, they can start to understand money.

These are the top six things I wish I taught my children when they were young.

1. Have a budget – and stick to it!

To get ahead financially, you need to know exactly how much you earn and how much you spend.

Include everything. It adds up.

For a budget to be effective you need to know how much is coming in, all the expenses, and how much you have remaining.

Then you need to determine a way to spend less than you earn.

This could mean making difficult decisions.

But it will pay off in the end.

Children can learn this through weekly pocket money income, and through completing odd jobs and chores for extra funds.

Then they can learn about the concept of money and how long it takes to earn, versus how long it takes to spend.

2. Make saving a habit

So you have a budget and are sticking to it.

SavingsNow it is time to entrench a savings habit.

When children see regular contributions to saving – whether it is for a big-ticket item or for a rainy day – they learn this is a part of wealth creation.

I now tell my children a good aim is to put 10 per cent of their income into a compounding investment.

Every contribution matters.

3. Invest in appreciating assets

We all have our foibles.

Some love fashion, some fine-dining, others flashy cars.

All these things are great and will bring you fleeting happiness, but they will not bring financial freedom in the long term.

I tell all young people to invest in assets that will grow in last and grow in value.

Time InvestIt doesn’t mean you can’t go into debt.

But I like to talk about the difference between “good debt” and “bad debt”.

Fashion, phones and handbags are bad debt.

Their value goes down as soon as you walk out of the shop.

Good debts are investments more likely to increase in value in the long run.

This includes property, shares and term deposits.

4. Learn about money and investing

Asset allocation, bonds, yields, interest rates, exchange-traded funds.

I understand why people turn away from the complexity of investment jargon.

interesting articlesBut that’s all it is, jargon.

Once you understand the terms and the concepts behind them, investing need not be complicated.

For all people, and especially children, you need to understand the financial world.

From simple budgeting to short-selling and derivatives, I believe people need to know “how money talks” so they can make informed decisions.

Then you can determine what the best investment and risk portfolio is for you.

5. Basics, mentors and advisors

I always ask for advice.

I even ask my kids for advice, when they are more expert in whatever the subject area is.

MentorThis is because I like to have a range of views, especially informed views.

Once you understand the basics, you can jump ahead more quickly with the assistance of a mentor or a trusted adviser.

These people have seen it all before.

Financial cycles come and go.

They have technical and specialist knowledge to help you negotiate the best plan for you.

Prioritise your life

You don’t need to be a billionaire to have a happy life.

PriorityYou only need to have enough money, with a buffer, to do the things you want to do and not worry about money.

Not thinking about money is a luxury.

The activities you spend money on may not be the ones I would choose.

If you care deeply about an area or field, then that is where you should aim to spend more time and money.

Making the right investment decisions early on means not having to worry about the investment down the track.

And developing that financial literacy as a child means they will become independent and confident as adults.

Now is the time to take action and set yourself for the opportunities that will present themselves as the market moves on

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Michael is a director of Metropole Property Strategists who help their clients grow, protect and pass on their wealth through independent, unbiased property advice and advocacy. He's once again been voted Australia's leading property investment adviser and one of Australia's 50 most influential Thought Leaders. His opinions are regularly featured in the media. Visit

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