Give them a piggy bank: Why every child should learn to navigate money with ethics

“Mum, why can we buy toys, but others can’t?”

My son’s question seemed simple, but behind it lay deeper questions about scarcity and fairness. And like many parents, I found myself unprepared to explain a system even most adults struggle to fully understand. 

Growing up in a remote village in northern Vietnam, I experienced scarcity first-hand. Only one child per family could attend school while the rest worked. These were choices shaped by poverty and silence. Worse, no one asked why. And that’s what drew me to economics: to find not just answers, but better questions and solutions. 

What if we taught kids not just how economies work, but why they work that way? What if, from a young age, they learned that the economy isn’t just numbers, but a system shaped by values, power, and people? It could transform their worldview and their future.  

Australia is facing a quiet crisis in economic and financial literacy. More than 1 in 6 Australian 15-year-olds fail basic financial literacy. The issue is particularly stark among young women: only 15% meet standards, compared to 28% of boys. Meanwhile, enrolments in Year 12 economics have dropped by nearly 70% since the 1990s. The Reserve Bank of Australia warns that a lack of economic understanding not only limits personal well-being but also weakens national participation. The National Australia Bank has reported increasing financial vulnerability among youth with low literacy levels.  

But this isn’t just a gap in knowledge, it’s a growing divide in civic understanding. 

Why financial and economic literacy must be taught with ethics

Too often, financial and economic literacy are conflated. In truth, they are distinct yet deeply complementary. Financial literacy teaches individuals how to manage money. Economic literacy explains the systems shaping those decisions. One is practical, the other structural. 

What’s missing is ethics – understanding who the economy should serve. This requires critical thinking about values, justice, and responsibility. It involves teaching children that every economic decision is a moral one, and that their choices can help shape a fairer world.  

By teaching financial and economic literacy alongside ethics, we not only teach survival skills, but cultivate thoughtful participants in a fairer economy.

This approach encourages them to assess trade-offs, consider long-term impacts, and understand the values reflected in their choices. It sharpens understanding of the hidden costs of our financial choices: the underpaid worker behind a “cheap” shirt, the personal data exchanged for a “free” app, and so on. In learning to not just ask “Can I afford this?” but “What does this cost others?”, students can develop both agency and empathy. 

Three timeless economic lessons every child should learn  

1. Choices and scarcity aren’t just a constraint, they’re questions of justice

Economics begins with scarcity: we live in a world of limited resources, so choices must be made. But helping children make smart trade-offs is often where financial literacy stops. 

Ethical economics asks a harder question: Why are some people forced to make impossible choices while others never have to choose at all?

Our resources are not evenly distributed, and how they are distributed reveals the underlying values of our economic systems. Furthermore, the mechanics of limited choices reveal the moral concerns of our society, issues ethical economics serve to investigate. 

When we teach children only to manage scarcity, to see limited choice as inevitable, we risk normalising injustice. But when we teach them to understand and question it – Who sets the rules? Who is left out? Why? – we nurture civic responsibility and moral courage. 

2. Incentives and transactions: the ethics beneath every exchange

Children learn the logic of trade early: stickers for chores, screen time for good behaviour, lunchbox swaps at school. These are their first lessons in transactional incentives, one of economics’ most powerful tools. 

But incentives are not morally neutral. They reflect what we value and who we reward.  

When we teach economics as just transactions, kids learn to see the world only through profit and loss. Ethics, however, reminds us that not all trades are fair or impassioned, and not all incentives are neutral. Behind every transaction is a judgement. Behind every incentive is a set of assumptions. Without accounting for context, incentives risk rewarding privilege while penalising disadvantage. 

Teaching children to recognise this helps them move beyond “getting what you deserve” to asking: Who is allowed to participate?

This teaches not just how to respond to incentives, but how to question what they promote and whom they serve. 

3. Markets need morality

Markets are often framed as natural forces: efficient, self-correcting, and impartial. But they’re not. 

Scottish economist Adam Smith’s “invisible hand” theory describes how individual self-interest can lead to collective benefit. Yet Smith, also a moral philosopher, warned that markets only work when anchored in trust, justice and social responsibility. 

English economist and philosopher John Maynard Keynes also argued that when markets fail, as they do during crises like the Great Depression, governments have an ethical obligation to intervene. During COVID-19, children saw this play out in real time: their parents receiving stimulus payments, rent relief or panic buying. But did they understand why?  

Well, they should. That’s the real lesson: markets need rules, and rules need values. Who gets what, and why? These questions encourage children to investigate systemic motives and hold them accountable to their ethical obligations. Teaching students that both markets and governments are designed by people and reflect our collective choices helps them understand they can shape these systems too. 

Raising ethical citizens, not just economic agents 

Teaching economic literacy without ethics risks raising informed consumers but disengaged citizens. But when we teach children that every economic choice reflects a set of values, we equip them with something far more powerful than a calculator; we give them a moral compass. 

As Nobel Laureate Esther Duflo reminds us, ethical economic education is not about ideology. It is about humility, empathy and evidence. It is about empowering people to improve lives, not only their own, but others’. 

So yes, give a child a piggy bank, and they may save for life. But teach them how economies work, who they serve, and what they exclude, and they will reimagine those systems with care. That is what it means to raise not just capable earners, but ethical citizens. And that is what we owe the next generation.