Ways to teach children about money
May 22, 2019
Children can get money for big events like birthdays and communions or on a more regular basis in the form of pocket money and the earlier you start teaching them about managing money the better.
Research from the UK has shown that children can form their attitudes to money as young as seven years old. Our own financial well-being study found that 75% of people considered to be financially secure had discussed money with their parents when they were younger.
Here are some things to think about when teaching your little ones about money:
Make a budget with them. Take them to the shop with you and explain that you have a set amount of money to spend and what you need to buy. Help them to check the prices of the items you need and add up how much they will cost to see if you have enough and if not, what do they think you should do? This is a straightforward task for adults but it is a great way to make money real for children.
Open a bank or savings account. Having their own bank or credit union account can be exciting for kids and it’s a great way to show them the benefits of saving when they start getting money. One of the key behaviours for future financial well-being is active saving so the earlier you can teach them the benefit of regularly putting something aside the better, even if’s just an old-school piggy bank.
Needs and wants. Teaching kids the difference between something they need and something they want is an important early lesson in managing money. You can help them to understand that if they buy the toy they want now they won’t have the money they’ll need for a new pair of football boots for next season.
Earning it helps demonstrate the value of money. If you give your kids pocket money get them to earn it by helping with age-appropriate household chores, this will help them form a link between working and making money. If they are saving for something big and it might take a while help them to stay focused on their goal by rewarding them with an extra euro for every ten they save.
You help show them how. Children and young people that learn about money management at home are gaining an invaluable life skill. Simple things like getting them to help with the shopping or taking them along to the bank or explaining in simple terms how loans and paying interest works can all help.Return to News