The best way to learn is by doing – and doing as young as possible.

That’s the philosophy behind the Spriggy app, which gives kids aged 8 to 17 a Visa debit card and an attached account that their parents can transfer pocket money into, and supervise in real time. (Even lock it if they need to.)

The kids move money onto their cards if they want to buy stuff; they can set up savings accounts and specific goals – giving a practical grounding in how to make responsible spending decisions, kickstarting life-long, positive money habits.

The guys behind Spriggy – Mario Hasanakis and Alex Badran, had both worked in banking and saw first-hand how much money banks were making out of the poor financial choices of their customers. So they set out to change financial literacy in Australia, from early childhood up.

Mini success stories

Since Spriggy launched in 2016 they’ve seen kids who’ve gone from losing cash in the bottom of their bag to now investing in equities with their parents, because they want to learn how stock markets work.

Some kids start up their own small businesses; and some are even saving for a house deposit. (Yes, saving for a house is the 13th most popular goal amongst their tens of thousands of young clients; buying an iPhone is the number one most popular goal and a Playstation4 is number two.)

Here are Mario’s picks for the three most powerful concepts to teach your kids

1. Delayed gratification

Mario believes this is the most important behavior demonstrated by people who go on to lead successful and happy financial lives. Learning to delay gratification and to resist online purchases especially, will be vital in the era of digital currency.

The simplest way to learn delayed gratification is by setting savings goals: kids learn to give up what they want now for what they really want in the future. An example might be: stop buying snacks on the way home from school so you can buy a game or music or concert tickets later on.

Spriggy also teaches kids about the value of saving into a place where your money is not immediately available; the app offers specific savings goals buckets that you can’t touch until you’ve completed your goal.

2. Compound interest

Einstein once called compound interest the 8th wonder of the world; today with interest rates so low, kids don’t have the patience to wait for a 1.5% return, but if parents want to encourage kids to save up, especially for a “virtuous” goal, they could try paying bonuses. Mario says some parents might contribute dollar for dollar or give them a high interest rate, so kids can see how their savings contributions are compounded over time.

3. The power of earning

Mario says that earning through pocket money is the best way for parents to communicate their values around money.

Households differ. Sometimes kids get paid a dollar value per chore – you work hard, you get money. In other homes, kids have to do chores as part of living in the house and they get pocket money which is just part of being a child, and the two aren’t linked.

It’s about 50/50 he says, and neither is right or wrong but it’s a real opportunity for parents to instill the values that they want their kids to have as they grow up. Most families would like to instill the value of hard work in their kids Mario says, by showing that if they’re creative and they’re disciplined and they try hard they can get many more of the things they want in life and be more fulfilled along the way.