Teaching children about money helps them manage their own finances as they get older. There are loads of age-appropriate ways to do this by keeping it simple and making it fun.
How does talking about money help?
Having conversations about money builds children’s confidence in the subject and helps to develop their financial skills.
Children who are encouraged to talk about money, handle it regularly, and have responsibility for spending and saving tend to do better with money when they grow up.
Do children learn about money at school?
Did you know
Our research shows that only four in ten children say they were taught about money and finance in school.
Some children receive financial education as part of the secondary school national curriculum in England, or the primary and secondary curriculum in Scotland, Wales and Northern Ireland. However, this isn’t always the case.
Why is it important to teach children about money?
Young children are like sponges and will absorb what you teach them and take it into adulthood.
Take some time to think of your own money habits:
- Did you pick up any of your money habits from your parents or caregivers?
- What good money habits can you trace back to your childhood learning?
- What bad money habits can you trace back to your childhood learning?
Teaching children about money will help make their future more secure. So the sooner you start developing their financial skills, the sooner they can start to hone those skills.
What should I teach about money?
All children are different, but there are some developmental milestones that can help guide what to teach them and when:
Three and four-year-olds: You can start teaching pre-schoolers about money from when they start to talk and ask questions – when they touch, investigate and play with everything. For tips, see our How to talk to three and four-year-olds about money guide.
Five and six-year-olds: They’re starting to develop a deeper understanding of numbers and will be able to pay attention for longer. This makes it a great age to move from playing to showing good money management. It will still need to be fun – but you can start integrating more money-related skills into everyday life. For example, saving for a new toy or turning shopping into a learning experience. For tips, see our How to talk to five and six-year-olds about money guide.
Seven and eight-year-olds: They’re beginning to understand the difference between wants and needs. This is a great age to talk about how they can start achieving some of their own wants through earning and saving. For tips, including the power of pocket money, see our How to talk to seven and eight-year-olds about money guide.
Nine to 12-year-olds: At this age, children are seeking independence. So you can focus on getting them to take responsibility for their own spending and saving choices. Helping them learn about how to be responsible with their money can also give you peace of mind as they become more independent in their decision-making. For tips, see our How to talk to nine to 12-year-olds about money guide.
Teenagers: When a child becomes a teenager, their aspirations will be bigger – and more costly. From thinking about what they wear to wanting the freedom that comes from learning to drive, this is an age when money really starts to matter to them. You can help them become money-savvy adults in three main ways: giving them financial responsibility; setting the right example; and by helping them manage their first wage. For more information and tips on these three approaches, see our How to teach teenagers about money guide.
Adult children: Conversations about money don’t stop when children become adults. Whether they’re still living with you or have their own place but are struggling to save for a first mortgage or pay off credit card debts, money is a topic that often needs revisiting. For more about how to talk to adult children about money, including how to ask them to contribute to household expenses, see our How to talk to adult children about money guide.
All children develop at different times. You may find they would respond better to some of the activities in the lower or higher age bracket. Simply choose the activities that are most suitable.
Six fun ways to teach children about money
There are lots of fun money activities you can use.
Try some of the following activities and use them to spark conversations.
1. Where we learn our money habits
Research shows that how we behave around money as adults is learned early on when we’re young and observations we make of the world around us.
Use the following activities to better understand how children learns about money – whether that’s from you, the TV, or their friends.
Children learn by watching:
When out food shopping, take them with you:
- Make money-related decisions out loud so they can hear you. For example, why you chose the shop brand cereal over the better-known brand.
- Compare prices out loud or ask them to tell you the different prices of products.
- Ask them to load the shopping at the till and hand over the money.
- Check your receipt in front of them.
- Ask them about how they saw you handling money and why they think you handled it in certain ways. For example, counting your change before you left the shop.
- Get out all their ‘must have’ items bought over the last few years.
- For each item, ask why they wanted it and how often they’ve used it.
This teaches them that wanting what their friends have is different from wanting something because they really like it.
2. Get them familiar with money
Handling money is an important part of gaining confidence around it. Start by letting them see and handle coins, notes, and credit/debit cards.
- Give them a piggy bank or money box for their own cash.
- Talk about why it’s important to keep money safe.
- Introduce the idea of saving for something they really want.
- Together, regularly count the money they’ve saved.
Counting your pennies
- With younger children, put lots of 1p coins and one each of a 2p, 5p, 10p, 20p, 50p and £1 coin on a flat surface.
- Build a pile of 1p coins next to each of the higher value coins to show the difference in their value.
- Take down the piles and ask them to recreate them.
3. Learning what money is used for
As they becomes more familiar with money, they’ll start to understand how it’s used day to day, including the different ways of paying for things.
The most important message to convey about spending is ‘when it’s gone, it’s gone’.
Doing things costs money
- List the things you’ll be doing with them over the next few days, including public transport and snacks.
- Put cash that covering these costs in a purse or wallet and ask them to pay for each item or activity using the money in the purse.
- If they ask for something extra, explain this might not leave enough in the purse for the other things they want to do.
Setting a spending limit
- Take them shopping for one day’s school lunchbox, giving them a spending limit.
- Give them a few choices for each of their usual items.
- Help them work out how much the different combinations will cost.
- Make sure the lunch they take to school only includes what they could choose within their spending limit.
4. Let them have a go
To gain confidence in their ability to manage money, they need to see that you have confidence in them.
You can show this confidence in them through pocket money and helping them learn to save. In other words, let them have a go with money.
The most important message to get across to older children is ‘save, spend, save again.’
- Perhaps give your child weekly pocket money to put in their money box or bank account. This doesn’t have to be much – the aim is to show confidence in their ability to manage their own money.
- Maybe give them the opportunity to top it up by doing chores around the house.
- Ask them how they feel about earning their own money and what they plan to spend it on.
- Gradually increase older children’s pocket money. This will help them learn to budget for their toiletries, clothing and social activities.
- Work out what you spend on them in one of these areas in a year, divide by 12 and give this to them as a monthly allowance.
- When they’re confident in one area, add another – and so on until they’re managing all their personal spending.
Save for something bigger
- Talk to them about something they really want but that their pocket money won’t stretch to.
- Help them work out how long it will take them to afford it if they save all, half or a quarter of their pocket money each week.
- Help them decide their best savings option, then make a progress chart to keep them motivated.
- Remember to praise them when they reach their goal.
5. Virtual money
Using mobile phones and other technology is a fact of life for most of us. This means children will be exposed to virtual money from a very early age.
If virtual money is already part of your life, don’t forget to show them that this part of your money management as well.
Watching the balance fall
- Get the balance on your current account from a cash machine or via online banking and show it to them.
- Use your card to shop for food, then get another balance and show them how it’s less than before.
- Do the activity again before and after withdrawing cash or shopping online.
Digital world disconnect
- Use a mobile phone to introduce them to the idea of ‘when it’s gone, it’s gone’.
- For a younger child, set a monthly top-up limit on a basic, pay-as-you-go phone.
- For an older child, use a contract phone that blocks any activity not included in the monthly contract fee.
Use game power
- Many digital games are based on the player collecting tokens that allow them to progress through levels or to get extra features.
- Turn household jobs into a similar game, giving them ‘tokens’ they can exchange for rewards, such as extra pocket money or a favourite treat.
- With teenagers, this rewards system can lead to the idea of getting a part-time job to increase their spending power.
6. Budgeting for children
By now, you’ve seen how children of all ages benefit from being involved in money. Now it’s time to help them plan a budget for something they want.
By looking at all the costs in advance, they’ll find they can make their money go further.
Once children learn basic budgeting through direct experience, it’s there for life.
Exploring the full cost
- Set a budget for a day out – this can be a big treat or just spending a day together near home.
- List all the things you all want to do and how much each will cost, plus any freebies.
- Remember to include all food, drink and transport costs (bus, train, car fuel and parking).
- Ask them if they have any ideas for how you might save money on certain aspects of the trip.
- Talk to them about what you could spend these savings on.
Plan to succeed
- For older children, if their monthly social life allowance disappears too soon, discuss breaking it down into four weekly amounts and ways of making these last a week.
- If they buy lots of clothes but complain they can’t afford the latest trainers, help them come up with a plan for saving over a number of months.
- If their allowance covers most personal spending, remind them to put money aside for essentials like underwear and occasional costs like magazine or game subscriptions.
More money-management ideas
For more ideas about money management for children, download our Talk, Learn, Do guide (also available in Welsh).
Also, see our page on How to teach teenagers about moneyopens in new window.
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