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Creating Financially Independent Children

Written by Katie Wesney based on research by Hannah McQueen.

I’ve got three kids who are 9, 7 and 5 and I worry about the financial future they face.  It feels like the cards are stacked against them.   House prices are three times more expensive (as a proportion of annual income) than they were two generations ago, they can have large student loans if they study and they face an uncertain future retirement benefit. These challenges make it harder for our children to get ahead.  We need to be empowering our children with all the financial knowledge and grounding they need to hit the ground running. 

I’ve been a Chartered Accountant for over 16 years and in my day job, I help people manage their money smarter but just like you, I also need to know I’m teaching the right financial skills to my kids.

Over the last two years, Hannah McQueen has interviewed hundreds of kids, teenagers, millennials and parents to better understand the financial challenges facing our kids, why this generation is more disadvantaged than the last, and what we need to do about it for her recently published book, ‘Pocket Money to Property: Creating Financially Independent Kids’.


  • Set a good example.  Your kids are likely to spend, save, give and budget just like you.  Children sniff hypocrisy as well, so you’ve got to practice what you preach!  Saying nothing is also giving them a strong message. If it’s not being taught specifically they’ll catch what you’re doing anyway!
  • Make sure you have your own retirement plan before preaching to your child, otherwise your message will be lost. 
  • Provide financial role models and honesty around your own finances and financial progress at an age-appropriate time.
  • All kids must be taught that you need to work to be paid money.  Most people introduce the concept of pocket money around six and they do chores to get money.  You need to make a clear distinction between paid and unpaid chores.  Basic jobs each family member needs to do.  They should be able to do paid chores up to the value of their age.  It’s about teaching children money gives you choices and you need to earn money – it doesn’t grow on trees.
  • One of the cornerstones of financial success is spending consciously. The purpose of splitting kids pocket money into spend, save and share is to bring consciousness around money earned for now and the future.
  • From age 13, children need to be making the connection between financial responsibility and personal independence.  You can start giving kids an allowance at this age to cover clothes, entertainment and mobile phones.  It’s not pocket money or an entitlement, it’s a tool to teach money management.  Don’t rescue them when they get it wrong.
  • From 14-16 they should be encouraged to get a part time job.
  • Creating wealth is less about how much money you earn but more about what you have left over. You need to teach your children how the banking system works and different wealth creation options.  They need to understand they need to spend less than they earn, the magic of compound interest and leverage.
  • Should you pay for your kids education? If you want to and can afford to then yes.  You need to make sure your own retirement is sorted first.  Interestingly one study showed if children pay for classes themselves, they perform better.  Skin in the game.
  • The student loan is a game-changer for the next generation so ensure they go into their course with eyes wide open.
  • All kids need a part time job and should be encouraged to work through university. Studies show work between 10-15 hours per week improves students grades compared to those who don’t hold a job.  It cuts down wasted time and helps develop strong time management skills.
  • Charge your children board when they have a job!
  • Should you help them get on the property ladder? Depends if you can afford to do so.  You need to understand what you need for retirement and if there is any gap what you’re going to do about it yourself.  Support can come from allowing them to live at home (paying board) or investing jointly.
  • Another option for parents wanting to position themselves to assist their kids in future is to buy an investment property earmarked for your kids future.  Not all properties make good investment properties and you need to understand your options.

“Telling our kids to reach for the stars is something we need to encourage as parents, but you can’t encourage this action without explaining the rest of the equation.  Because for every measure of inspiration, there must surely be an equal dose motivation, a generous serving of strategy, with a side of good timing.” Hannah McQueen

We’re giving away 10 double passes to Hannah McQueen’s Creating Financially Independent Kids seminar this Wednesday 7pm at Rangitoto College. Email to get your ticket.

About the author

Angela Cameron - CA, CPA

Executive Director

A chartered accountant by qualification, she is a recruitment leader by nature.

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