The money advice Paul Clitheroe gave his children

Raising kids can be a tough job. From toilet training to helping teens get their driver's licence, parents and carers are called on to share their wisdom over many years and over many topics. So, it can seem a tough call to add financial literacy to the list.

Our children need to learn about money matters. And if advice and learning doesn't come from mum and dad, kids will fill the vacuum with information from other sources. An ASIC survey found one in three 18 to 21-year-olds follow at least one financial influencer - or 'finfluencer' - on social media.

Fortunately, Australian finfluencers are required to have a financial services licence. However, as any parent knows, the internet can be a vast, and largely unregulated, swamp of misinformation from across the globe.

A quick look through the posts of several hugely popular US finfluencers tells me many are spruiking dodgy get-rich-quick tips. That's not what our kids need.

To be fair, our schools, education services such as the Ecstra Foundation's Talk Money program, and ASIC's Moneysmart website are all doing terrific stuff. Even so, I'm often asked why teaching kids about money has become the role of educators and regulators; what about the traditional role of parents?

It's a fair question. The answer is not that we parents have become hopeless at handing down money skills. It is that the world of money has become so complicated.

Making money real

The biggest challenge for our kids, and many adults, is that money has become invisible.

Think about what a small child sees happening when they go with mum or dad to the supermarket. They reach the checkout with a full trolley, a plastic card is handed over, and the cashier asks "Would you like cash with that?" The whole transaction can send the wrong message to kids.

It's all very abstract for children when most of our transactions are digital, involving electronic transfers and pieces of plastic. At least cash can be seen and felt - and it's pretty obvious when it's all gone.

In our modern world, the key is for parents to make money real. This means including kids in conversations about money as part of everyday life.

Set financial goals for your family, like saving for a holiday. Talk to the kids about these goals and how you plan to reach them. Share conversations about needs versus wants, and how to prioritise spending.

I was lucky to grow up in a house where money was a subject of conversation at the table. I continued the tradition by talking to my own kids about money, especially through their high school and university years.

It was mostly simple stuff: spend less than you earn. If you don't want to do a budget, don't do a budget. But if you earn 200 bucks a week from your weekend job, don't spend 200 bucks a week.

I've always aimed to phrase things in terms of what can leave my kids better off. I think that's important. It's not brainwashing. It's about creating a spark of interest and encouraging good money habits.

A Clitheroe tradition

I've maintained another Clitheroe tradition also. When we were kids, my parents bought shares for my sister and I, and encouraged my grandparents to do the same, adding them to our Christmas money each year.

I thought this was all fairly boring until I reached age 17 when the shares really started to become worth something. I think if mum and dad had thrust investing down my throat, I would have run for my life. Happily, it was never done like that.

I have taken the same approach with my own children.

My wife and I bought well-known shares "as trustee" for our three children. Over time the investments did well, and the kids got interested as they grew older.

Investments such as shares and exchange-traded funds can often be held in a parent's name as trustee for their children. When the kids reach 18, the investment can be transferred to them with no capital gains tax as the children were always the 'beneficial owners'.

I realise not every parent is in a position to buy investments for their children. That's okay. There are low-cost ways to give kids practical experience with money.

Pocket money and savings accounts

I'm often asked, for example, about the 'right' approach to pocket money. There are no hard and fast rules.

What matters is that, as parents, you decide what you want to achieve with pocket money, and share this with your children. Is it just for treats? Or should part of it go towards the kids paying for their own school lunches? There's scope here for early lessons in budgeting.

It's the same with children's savings accounts.

I often see families where mum and dad are the only ones contributing to their child's savings account. This means losing a golden opportunity to teach kids how 'little and often' deposits can grow into something big, especially with the power of compounding.

The upshot is that the world of money is complex and fast moving.

It is great that our educators can nurture our children's interest in money - and help make them money-savvy. For me though, a combination of formal education and learning at home is the way to go.

Speaking of which, my youngest daughter is coming over for dinner tonight. I'm keen to tell her about the latest SMS scam that appeared on my phone today. The sharing and learning never stop.