Teaching children how to intelligently navigate payment methods like tap and go and buy now, pay later is critical to improving their understanding of money, a financial literacy expert says.

Queensland last month became the latest state, following Victoria and the ACT, to exclude Commonwealth Bank’s Dollarmites banking program from primary schools after financial regulator ASIC found it exposed young children to sophisticated advertising and marketing tactics.

As part of the national curriculum, school children still learn skills ranging from counting money in their early years to understanding the hidden costs of a mobile phone contract later on.

But a new program aimed at giving teachers more resources to help boost students’ financial capabilities is to be piloted from June, and will cover topics such as tap and go for teenagers, managing music and gaming subscriptions, and buy now, pay later.

Program leader Carly Sawatzki, from Deakin University’s School of Education, has over the past decade researched how children understand money, interviewing students and their parents and teachers in Victoria, the Northern Territory and New Zealand.

One of her findings is that young people are more attracted to buy now, pay later options like Afterpay than credit cards.

Most older teenagers grasp the interest costs associated with late credit card repayments but are often unaware that buy now, pay later options are not free if you miss a repayment.

“Young people get that credit cards can be a debt trap, but an unintended consequence of this teaching is that they think buy now, pay later is a really good idea,” she said.

“Buy now, pay later is appealing to young people in casualised work (and) often their bank balance fluctuates, so if a payment is declined, then they risk paying a late payment fee and those fees can add up.”

Dr Sawatzki said many teenagers have access to a debit card through their mobile phone, which is a gateway to invisible transactions like app subscriptions.

“What becomes important is creating opportunities for explicit conversations with children so that we are making the invisible a bit more visible,” she said.

Meanwhile, Laura Higgins from ASIC’s MoneySmart said understanding financial concepts such as budgeting, saving and managing debt can help young people make informed money decisions later in life.

“A good way to teach children about money is to include them in discussions about family finances,” she said.

“Use real-life situations, like withdrawing cash at an ATM or paying for groceries at the supermarket, to frame these discussions and help them understand where money comes from.”

Younger children can learn about the difference between needs and wants and can also help plan finances for activities like going to the movies, including the cost of transport, tickets and snacks, Ms Higgins said.

She said owning a family pet can also offer opportunities to teach children about money, by allowing parents to discuss the costs associated with pet ownership, such as food and vet bills.