Tips to teach your kids about money.

Want to teach your kids good money habits but don’t know where to start? Here’s some clever tips from Kara Gammell, award-winning consumer journalist, and personal finance expert.

    Published:16 Jan 2023


    Children’s relationship with cash starts earlier than you might think. Research from the government-backed Money and Pensions Service, found that adult money habits are set by the age of seven. Seven!

    In other words, before children even hit primary school, it’s already determined whether they will be ‘savvy spenders’ or ‘splashing-the-cash’ types.

    So, what can parents do to help get their children onto the right path? After all, many of us were raised to think that money is a taboo subject.

    Forget lectures and lessons, here are 8 ways to get started – and the kids won’t even know they’re learning.

        1. Make everyday activities a learning opportunity

        Talking about taxes with a toddler is not going to do much but there’s lots of things that you’re already doing that could be a good start.

        Take the weekly food shop, for instance. Use this as an opportunity to talk about planning, saving and finding the best value. Let your children hold the shopping list and tick off each item or if they’re older, give them a few items from the list to find on their own at the best price.

        When my daughter was in preschool, I used to print off a picture-list of what we needed so that she could tick off items as we went around the supermarket. Not only did it get her involved in the grocery shopping, but it kept her amused while I worked my way through the aisles.

          2. Break out the board games

          If you want to teach your children about money, crack out the ever-popular board game Monopoly – you’ll be surprised what they can learn while you’re all having fun.

          Here your kids will be putting their mental arithmetic into practice outside the classroom, and will learn about paying taxes, buying property, forking out for rent and earning a salary.

          What’s more, the mortgage rules illustrate that it costs money to borrow money. In a world where debt can have a huge impact, this is a life lesson that every child should learn early.

            3. Choose your words carefully

            Though experts warn against telling your children that you can’t afford it, it’s easy to use this default response when your teenager is begging you for the latest trainers.

            But saying this sends the message that you’re not in control of your finances, which can be scary for kids – and create future money anxieties.

            With my daughter, instead, I like to say: “I choose not to spend our money like that.” It really does work.

              4. Pay them pocket money

              Paying your kids an allowance is a great way for them to learn how to handle money on their own – so long as it’s used appropriately. But when is a good age to start?

              Experts suggest that starting with a weekly amount when your child enters infant school, and then spacing out the timing to fortnightly or monthly by the time they’re finishing secondary school is most appropriate.

              Decreasing the frequency of payments will be a great lesson that will set them up well for adulthood and a monthly salary.

                5. Use cash instead of cards

                One of the best ways for children to see money in action is when you make transactions with cash – whether it’s at the shops or through giving pocket money.

                It’s only once they’ve grasped ‘real’ money that you can move on to the more difficult concept of virtual or digital money.

                  6. Use glass jars to save

                  It’s crucial you show your children that money can play a variety of roles in their daily living whether it’s spending today or saving for tomorrow.

                  Providing pocket money in smaller amounts can help you and them decide what savings goals they want to put their money towards, and how much for each.

                  By encouraging saving, children experience the positive emotions – particularly satisfaction – connected with saving money.

                  For younger kids, labelled jars work to separate the money – one for saving, one for spending, and one for sharing with those who are in need. Anytime they make money by doing jobs around the house or receiving birthday money, encourage your child to divide the cash equally among their three jars.

                  It’s not a huge act, but it does start the thought process at a young age that it’s okay to spend some of your money, if you’re giving back to others and saving as well.

                  Once they’re older, you can set them up with bank accounts that mirror the split.

                    7. Discuss the difference between needs and wants

                    It’s only natural that kids want the latest toys and gadgets, but making them understand the difference between needs, wants and wishes will help them make sensible spending decisions from a very young age.

                    One way to do this is to put it into a context that your child can understand – for instance, explain how many weeks of their pocket money it would cost to pay for the item.

                      8. Learn from your mistakes

                      As hard as it is to stand back and let your child control their own cash, there is value in doing just that.

                      If things go wrong, resist the urge to fix it for them.

                      Believe it or not, dealing with the consequences of their actions will force your child to learn to make smarter financial decisions.

                        Important information

                        The content on this page aims to offer an informative introduction to the subject matter but does not constitute expert financial advice specific to your own situation. All facts and figures were correct at time of publication and were compiled using a range of sources.

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