Easy ways to teach children about money

We all know how important financial literacy is for children and teens as they move forward through their life, we need to prepare them for an increasingly expensive world were budgeting skills are needed more than ever.

It's one life skill we cannot ignore and starting from a young age is important and there are plenty of ways to encourage a healthy approach to money that is both engaging and fun for children. 

As parents, it's our role to instil a healthy attitude towards money, both for ourselves and our children. I would always recommend putting things in place like Life insurance and a Will (I've sorted out both) should anything happen to us, but also saving accounts for our children if possible. I have Premium bonds set up for the boys, even though there is only a small amount in each, it's something. You can also consider investing or looking into UGMA accounts on behalf of your child. 

As a parent who has recently set my teen up with his own debit card, as well as having a younger child who has his savings jar at home, I wanted to share what has worked so far. 

1. Talk to your children regularly about money 

We need to have regular, honest conversations with our children about the cost and value of daily items. Discussing our own financial decisions, how we budget for the week and what our plans are in terms of days out and how that fits into our budget. You can also touch on how money is earned and different ways you pay for things - online, by card, subscriptions etc 

2. Involve them in the weekly shop

Once your children are old enough to navigate the supermarket (with your supervision of course) and can read, then write out a small list of groceries you need and ask your children to choose the best-value combinations of the products on the list and get them to add up as you go along, is great real-life experience that will help grow their understanding of the value of essentials such as food and groceries. 

3. Talk about the difference between want and need

This is a useful conversation to have at any age, even with adults, a reminder between the things we want and those things we really need (such as food, bills etc). Children need to understand that as they grow older, we need to cover our essential outgoings before spending money on things we want but don't absolutely need. 

4. Pocket Money as a tool

Pocket money can be a really useful teaching tool, it doesn't need to be loads of money, my boys get £5 each per week and I encourage them to save this money as they can use it for things they really want in between life events such as Birthdays and Christmas. It also helps to teach the lessons of "you can't spend if you don't earn", so if there is something they really want they need to save their money and if it's spent before they reach their goal that is their choice but I won't fill in the gap. You can print out budgeting worksheets for children here. 

5. The importance of security 

Looking after both our physical and virtual money is very important and children need to understand if they lose money or it's stolen then it is unlikely to be replaced (we have all been in that situation and it's a hard life lessons to learn but an important one). Explaining that PIN numbers are personal information that needs to be kept safe and secure, the same with money in the home, it should be kept in a safe place. 

For more tips on teaching kids about money, check out this post. 

*Written in partnership with Responsival