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Teaching children and young people about money

It’s never too early to start teaching children about money.

Whatever their age, educating children and young people on how to budget, save and manage money can help build good financial skills for life. 

Building the foundations – 3 to 7 years

Developing money management skills – 7 to 11 years

Growing financial independence – 11 to 16 years

Young adults – 16+

Building the foundations – 3 to 7 years

Talking about money and why we use it is the first step in building a child’s confidence around the subject. 

Getting your child involved with counting coins and paying for things at the shop can help them understand the value of money. It can also help them think about how, sometimes, you can’t always buy everything you want to and need to prioritise. 

Playing shop is a great way to make money fun for younger children. For example, you could add small price tags to toys at home, set an easy budget for them to spend and help them work out if they can afford something.   

You can also explain the concept of saving and the importance of keeping money safe. Giving a child a money box provides them with a safe place to keep, and save, their money.

Explore: Teaching kids about money

Developing money management skills – 7 to 11 years

Growing your child’s money skills as they get older can help them understand the decisions we make around money. 

Teaching your child about needs and wants can encourage them to be more mindful about how they prioritise spending. For example, you could challenge them to write a shopping list, using a set budget – listing both essential and ‘nice to have’ items. Once at the shop, they’ll be able to see what they can afford, and will need to prioritise what to buy. 

You could also ask them how much they think things like bread, milk and eggs cost, and then take a trip to the supermarket to find out. 

Discussions around planning for the future and setting savings goals can also take place. For example, they may want a new pair of trainers – this could be their goal. You could then encourage them to work out how long it would take them to save up the money they need with their pocket money. 

Explore: Financial literacy for kids

Growing financial independence – 11 to 16 years

Pre-teen and teenagers will likely have bigger ambitions for their money. For example, they may want the latest phone or game console. You may want to reinforce the idea of saving money and setting financial goals, as well as how to stay safe from things like fraud and scams. 

If your child gets pocket money, or they have a job, you could also use this as an opportunity to teach them about budgeting.

For example, you ask them to make choices around their spending, such as what they’d do if they didn’t have enough money, or how they’d keep track of what they have available to spend. You could also show them how to spot good and bad deals, as well as compare items to help them get value for their money. 

As your child becomes more financially savvy, you may consider opening a children’s bank account, so they can manage their own finances including helping them to learn about online and mobile banking to help them keep on top of their spending.

Explore: How to become financially independent

Young adults – 16+

Whether they’re heading off to university or starting their first job, conversations around money don’t need to stop when your child becomes an adult.

They may have money coming in, from a monthly wage for example, or they may have more outgoings, such as university costs which they need to manage with a student loan. Now could be a good time to help them brush up on their budgeting skills and take in all their added incoming and outgoings. 

Use our budget planning tool to help.

It could also be the perfect time to look at how they can build their savings, and set bigger savings goals for things like their first car, or even a house deposit

Once your child reaches 18, they may qualify for their own credit card. Now is the time to explain how borrowing works and the need to repay what they spend, with possible interest. Missed or late payments can lead to charges and affect their credit score, which can make it harder for them to borrow money in the future.  

Explore: 5 reasons to care about your credit score

Getting in debt is something that can happen, so helping your child know what to do if this does happen and where they can get support can help reduce any future stresses. 

They can find more about managing money at university on our student hub.