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How do I educate my child about money?

It’s never too early for your children to learn about money. They begin to build attitudes around money as early as five years old. So it’s important to start good money habits as early as possible. Helping them understand spending and saving can help them make good financial decisions as an adult.

First steps

Begin by letting your child handle coins, notes and cards to help them see money as part of everyday life.

3-4 years old

Help your children understand that:

  • coins have different shapes, colours, sizes and values
  • notes and coins are worth different amounts
  • money can be spent in different places on different things 
  • things have different prices, such as a toy, or a bus fare
  • you can keep money safe in a money box or bank account.

Activities for slightly older children

  • Counting pennies – Place a pile of 1p coins next to a 2p, 5p, 10p, 20p, 50p and £1 coin to show their different values.
  • Playing with cash – Spend only cash for a week. Let your child hand it over or count it and check the change with them.

As your children grow up

They’ll start to understand how money is used and the different ways people pay for things. The following activities will give them an early start at budgeting and saving:

  • Write a shopping list and sticking to it. If your children ask for things outside the list, remind them to stick to it to buy today’s items.
  • Use a money box or piggy bank. This will show the importance of keeping money safe and help explain saving for things you want later instead of spending now. Help your children count how money will add up if they save it.
  • You may even want to open a child’s savings account to transfer their money box or piggy bank to.

There are alternative savings and investments options available for children such as Junior ISAs, Premium Bonds and Child pensions, read our how can I save money for my child’s future to learn more.

The Money Advice Service offers further guidance on how to talk to your children about money.

 

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