8 easy tips on how to teach your kids about money

Want to help your kids learn valuable money skills? Here we’ll go over 8 easy tips you can use to help your children develop good money habits. From giving them pocket money to talking about important financial ideas, we’ll show you how to teach your kids about money in a simple, fun way. 

1. Think about your money mindset first

Before teaching your children about money, think about your own feelings towards it. Your ‘money mindset’ is often shaped by your life experiences and how your parents' handled finances when you were young.

Ask yourself: 

• What are my money habits?
• How do I feel when I spend or save money?
• How important is money to me?  
• How do I feel about debt? How do I feel about paying my debts? 

Now, think about if you want your children to have the same ideas about money as you. If not, you might need to work on changing your thoughts about it first.  

2. Start early 

You may be asking yourself, what age should kids learn to handle money? 

It’s worth starting to educate your kids about finances early on. Even very young children can begin to understand how money works. Research from the Money and Pensions Service found that by age 7, kids already have well developed money habits.

Just make sure your money chats and activities match your kids’ age. Even something as simple as letting your children hold the shopping list while you do the food-shop together can begin to teach them the value of money.

3. Show and tell 

Children learn by watching and listening, so try to lead by example. Use everyday activities as an opportunity to teach them about handling money wisely:

• For younger children, you could involve them in simple tasks like counting coins or explaining how you budget for the weekly food shop. When you’re out shopping, you could show them how you compare items and find good deals. 
• For older kids, talk about your spending decisions and how you save for bigger purchases, like a family holiday. You could even show them how you manage plan ahead.  

Try to make sure your actions match up to your words to avoid being confusing. Being consistent in what you say and do will help them develop strong financial skills over time.

4. Keep it fun - money lessons for every age 

Talking interest rates with a toddler is not going to be the best way to help them understand money. It’s important to keep it age-appropriate and enjoyable. Here are some activities you could try for different age groups:

Ages 3-5:

• Play games like shopkeeper and customer using pretend money
• Have fun with counting and sorting games using coins
• Make coin rubbings to explore the designs of different coins

Ages 6-9:

• Play board games together that involve maths and financial skills, like ‘Monopoly’ or ‘The Game of Life’
• Make a list of items and ask your child to split them into either ‘needs’ or ‘wants’
• Play a food-shop scavenger hunt. Give your child a list of items to find under a set budget. This can be a great way to teach them to compare prices.

Ages 10-13:

• Give them a real-life money task, for example asking them to help you plan and budget for a family holiday
• Let them manage their own pocket money and save up for something they want to buy

Ages 14-17: 

• Help your teenager look for a part-time job or gain some work experience, and provide guidance on how to manage their wages   
• Show them your payslip and explain what each part means
• Teach them about the value of compound interest by playing a stock market simulation game

5. Think digital 

When was the last time you used cash? These days, we often use digital and app-based banking to manage our money. It may be surprising, but even young children can learn about digital payments. Once they have understood cash payments, it’s time to introduce digital ones.

Here’s how:

• Start by explaining how digital money can be used to pay for things instead of cash
• Then, show your children how your banking app works on your phone or watch
• Demonstrate how money comes out of your account after you’ve made a purchase
• Explain how you need to keep track of digital payments by looking at how much money is in your account before and after spending
• Talk about how it’s important keep passwords, PIN numbers and cards safe

Teaching your kids about digital money early on will prepare them for smart financial management later.

6. Let them earn money 

By giving your kids the opportunity to earn pocket money through chores or tasks, they can start to learn the value of working and the rewards it brings.

Some tips for pocket money:

• Pay them on the same day each week or month to help prepare them for managing a regular income
• Show them how to keep their money safe – this could be by using a piggy bank for younger kids or a bank account for older ones
• Encourage them to save some of their pocket money for things they want to buy

Remember, it’s not about the amount of money, but the lessons it teaches. Even small amounts can teach them well, so don’t feel pressured to give more money than you can afford.

7. Let them give it a go 

As your children get older, letting them open their own bank account and handle their own money is an important step in their financial learning. 

Today, many banks offer special accounts designed for young people, mostly aimed at ages 11-17. These accounts often come with debit cards and connect to mobile apps. They’re often designed to make managing money online simple and can help kids learn how to use online banking firsthand.

Another option is to use a pre-paid cash card. This can let parents have more control to monitor spending and set restrictions.

8. It's okay to make mistakes 

Everyone makes mistakes, and it’s an important part of learning. When your children start to manage their own money, they may make some mistakes. Rather than fixing these slip-ups, let your kids use these as valuable lessons to improve their money management.  

Where can I find more resources about financial literacy? 

You don’t need to be a financial expert to teach your kids about money. Simply involving them in money conversations, showing how you manage money and helping them with practical skills is a great way to help them learn.

If you’re looking for more information, try these places:

• Most high-street banks have sections on their websites with resources on teaching children about finances
• MoneyHelper is a government-backed service with lots of content around talking to children about money

Key takeaways 

Teaching your kids about money is a valuable gift that they’ll be able to benefit from their whole lives. Using these 8 easy tips, you can help your children develop the money skills that will help them become responsible with their money.