From advice service MoneyHelper
Children start to learn about money from early childhood. Parents and carers have the most influence on how children deal with money in adult life.
Teaching children about money helps them manage their own finances as they get older. There are lots of age-appropriate ways to do this by keeping it simple and making it fun.
Why is it important to teach children about money?
Teaching children about money equips them with the knowledge and skills they need to manage their money effectively now and in the future. Children who do better with money tend to have parents/carers who talk to them about money and give them responsibility for spending and saving from an early age.
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.
Talk Learn Do
This digital tool provides parents and carers with the skills and confidence to talk to their children about money. It also shows why it’s important to teach good financial habits from an early age.
It breaks down important topics into fun activities and bite-sized information, such as pocket money, saving and shopping trips.
Talk Learn Do is for 3–11-year-olds and can be used by family, carers, social workers, teachers and youth workers.
How do I teach my child about digital money?
We’re fast becoming a cashless society. Many of us pay for our shopping with debit and credit cards and check our balance on our mobile phone. While it’s quick and easy for us, it can be tricky for children to understand that we’re spending real money.
Show them how digital money works by explaining the basics, such as:
- digital money means paying for things without using cash
- you can use your card, phone or watch to make payments
- your phone has an app that connects to your bank account and show them
- cards take money from your bank account using a card reader, which you can show them next time you use contactless
- your bank account is where you keep your money
- use an app to move money between accounts and pay for things you buy online
It is well worth taking some time to explain how digital money works, so your child, even if they’re young, understands that you are not getting things for free when you make a cashless payment.
See more on the MoneyHelper website.
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 the MoneyHelper guide how to talk to three and four-year-olds about money.
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 the MoneyHelper guide how to talk to five and six-year-olds about money.
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 the MoneyHelper guide how to talk to seven and eight-year-olds about money.
Nine to 12-year-olds - at this age, children want 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 the MoneyHelper guide how to talk to nine to 12-year-olds about money.
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.
To support your teenagers with their financial education download a free copy of Your Money Matters. This book has been designed for use with young people aged 14 to 16, but it is a resource for teens of all ages, and adults too. It covers topics such as spending and saving, borrowing, debt, insurance, student finance and future planning.
More from MoneyHelper
You can access further independent, impartial and free guidance and support around all aspects of money and pensions at www.moneyhelper.org.uk or speak to them free in confidence on 0800 138 7777.