Finance lessons: how to teach your young child about money
Start teaching your child or grandchild about money with these simple and fun ideas.
Teaching children about how to handle their money is as important as teaching them how to cook, clean and mend everyday things.
Yet many parents neglect teaching kids about cash because they want to shield them from harsh adult responsibilities, or perhaps because they’re ashamed of their own money mismanagement.
However, if you skip teaching your kids, you’re fairly likely to pass down your bad habits, so start teaching them early.
Follow these seven simple tips to get your young’uns on the right track with their money.
Tell them to wait 24 hours to buy something (they think) they want
Waiting a day gives the child a chance to decide if they really want or need what they're after, helping to curb impulsive spending habits early on.
Ask them to create three jars – one ‘saving’, one ‘spending’ and one ‘sharing’
Every time the child receives money, divide each equally among the three jars. It’ll help to teach them the importance of divvying up their money between saving and spending as well as a great introduction to charitable spending.
Talk to them about their savings goals
Even if it’s for something as small as a new yo-yo, have a chat about why they want that item and what they’re doing to reach their goal.
Teach them to recognise different coins
This one’s easy – just grab your purse or wallet, empty it out and teach the child what they are. It's a fun way for them to familiarise themselves with the coins' textures, shapes and they sound they make when they fall on a hard surface. If you want, you can let them keep the coins they’ve guessed correctly as a reward.
And if you have any foreign coins lying around the house, chuck them in too.
Which coins make up this amount?
Once they can confidently identify different coins, ask them to use as many combinations as they can to make the coins add up to a certain value.
Teach them to store money safely
While you’re there it’s a good idea to teach them to keep money safe and out of sight, explaining that others might pinch it or it might get lost if they don’t look after it.
Play Shops… but with real coins
The past three tips will really help here. Take it in turns to be the cashier and the customer, paying for fake goods and services with real money. You can really test if they're looking after their money by pretending to be a crafty robber too.
A little extra help
Twinkl has some great exercises for kids which are free to download.
Barclays also has a Money Skills series for kids of smaller children as well as young adults. Have a go at activities two and three from the first resource pack – they’re really useful and fun guides for children this age.
If you don’t mind the characters using dollars, Sesame Street has some great starter money lessons for children. The currency is different, but the principle is the same. You can watch them online or through Sesame Street’s YouTube channel.
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Source: YouTube / Sesame Street
More on family finances:
Regular, fixed-rate or instant access: the best children's savings accounts
How to be the Bank of Mum and Dad: helping your children with a mortgage and the tax implications
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