Teaching children about money - aged three to six years

It’s never too early to start teaching children about money. Giving them money of their own can help start to build good financial habits for later in life. 

Children aged three to four

Helping children aged three to four understand how money works

Here are three National Curriculum topics for three-to four-year-olds, along with practical tips on what you can do to help them build their understanding. Information correct as of February 2023.

1. The value of cash

In a world of contactless spending, it’s as important as ever for young children to learn about cash. At this age they may:

  • Start to recognise differences between coins and notes and appreciate their different values.
  • See how pennies add up to pounds.
  • Understand that money is valuable and needs to be kept safe.

Learning together: Coin spotting 

Have fun by giving children some coins to play with. Whether its plastic play money for the youngest or actual cash as they get older. Show them the shapes, sizes and colours. Talk about the different values, and which ones might be worth more.

This could be a great opportunity to start talking about other ways to pay, such as chip and pin and contactless spending. Please make sure children are supervised at all times, as small coins could be a choking hazard. 

2. Choices about spending 

At this age, children can spot that money is spent in many places and in varying amounts, whether buying toys in a shop or drinks in a café. Now they may:

  • Start to make choices about money, such as weighing up whether to buy sweets or stickers. 
  • Learn the big lesson - that once money is spent, it’s gone, and can’t be spent on something else.

Learning together: Consider giving small sums of pocket money

If children start asking for things in shops, this could be a good opportunity to get them thinking about spending. For example, consider giving them a small sum and help them work out what they can afford to buy.

3. Using money

At this age children can start to:

  • Grasp that money can be saved up or given away and isn’t just for spending on things they want. It sounds simple, but you’re actually introducing ideas about basic budgeting, resisting temptation and thinking of others.

Learning together: Pop coins in a piggy bank

Piggy banks are great way to get children started on saving, making it fun and providing a safe place for their money. They can see the coins mounting up and feel their piggy bank getting heavier. You could make a game out of counting their cash, to reinforce how their savings grow if they don’t spend them.

Helping children aged five to six understand how money works

As they get a little older, they’re likely to have started picking up money habits. Their understanding is growing, and they can see that money can buy things they want. Here are three National Curriculum topics for five-to six-year-olds, along with practical tips on what you can do to help them build their understanding. Information correct as of February 2023.

1. Keeping track of money

As children learn how to read, write and count, they can start keeping track of money and start to keep simple financial records.

  • If they have some of their own money, they could jot down the amount they’ve spent. If not, they could do this for a small household purchase – recording spend against budget for example.
  • They can look back at what they’ve achieved and feel proud of the saving and spending.

Learning together: Tracking a savings goal

Decide on a savings goal with your child, such as a toy or a family day out. Work out how much it might cost, and help make a chart, breaking down the total into small amounts to tick off. 

2. Wants and needs 

Recognising the difference between wants and needs can help children understand tough spending choices.

  • ‘Wants’ are the nice-to-have stuff they could live without while ‘Needs’ are essential to survive, such as food, water and a home.
  • Paying bills may not seem as exciting as buying toys and ice cream, but children of this age can start to understand priorities. 

Learning together: Everyday wants vs needs 

Talk about ‘wants’ and ‘needs’ when writing a shopping list for the supermarket. Point out the essentials such as fruit, vegetables, pasta and rice, and any treats like sweets, biscuits and ice cream. You could chat about whether stuff on the shelves is a ‘want’ or a ‘need’. You could also discuss any disagreements, if they are keen to add extras to the trolley!

3. Saving money

Children of this age may be able to recognise that by not spending on small things, they can save their money for something bigger. Encouraging a savings habit now will help them in later life.


Learning together: Make it fun 

Label three different containers for spending, saving and giving, to show how money can be used for different purposes. If your child receives pocket money, birthday or Christmas money or earns cash for doing jobs around the house, help them divide it up. Empty jam jars are great, because children can actually see the coins building up. 

Make it more real by talking about how they might want to use the money. What would they like to buy now? What would they like to save up for? 

Related information

Seven-to-eight years old

At this age, children want to make more of their own decisions about saving and spending.

7 to 8 years

Nine-to-10 years old

As children progress through primary school, they will start picking up on popular trends and advertising designed to affect spending.

9 to 10 years

11-to-13 years old

Starting secondary school is a big step. Children will be getting more interested in money and making decisions that could affect their future choices.

11 to 13 years

14-to-16 years old

Teenagers are often keen to become more independent and learn to manage their own money.

14 to 16 years

Further support

Money management

Our tips and tools can help you manage your bills and credit, while helping you save and feel better about your finances. 

Money worries

If you are struggling with your finances, or are worried about the increased cost of living, you are not alone. We are here to help you get back on track.