Money lessons for your child

It’s never too early to learn good money habits. Understanding how money works is an important life skill that helps children build financial confidence as they grow up.

If you’re not sure where to start, we’ve put together some activities you can do with your child. Select their age group to get some ideas.

  • Money lessons for children aged five and six

    When your child reaches school age, they understand more about how to use money. Here are some activities to support their learning at home and while out and about.

    Activity 1: Understanding wants vs needs

    Help your child learn the difference between things that are nice to have and things that are essential to survive, like a home, food, and water.

    When you’re writing a shopping list, explain which items are nice to have and which are essential. Next time, your child can practice picking out which things they want and which they need.

    This helps them learn:

    • About difficult spending choices.
    • How to prioritise spending.

    Activity 2: Start learning to save

    Your child is ready to learn that not spending their money on small things can help them save for something bigger. Teaching them this skill early helps build good habits for when they’re older.

    Set up three jars, one for spending, saving, and giving. Old jam jars work well because they can see their money building up inside.

    When they get money, help them divide it between the jars.

    This helps them learn:

    • How to divide their money and use it for different things.
    • That they can also share their money with other people.

    Activity 3: Tracking their money

    It isn’t too early for your child to start making basic financial records now that they’re learning to read, write, and count.

    For spending: if they have pocket money, ask them to write down how much of it they spend. Or, if they don’t get pocket money, help them make a budget for the weekly shop and compare it to how much you end up spending.

    For saving: make a savings goal for something your child wants. Break down the total amount into smaller chunks for them to tick off as they save.

    This helps them:

    • Learn to keep track of their money.
    • Feel proud of how much they’ve saved and spent.
    • Look back at what they’ve achieved.

  • Beyond the basics – spending and saving lessons for children aged seven and eight

    Your child might be becoming more independent, wanting to make their own decisions about how much to spend and save.
    We’ve put together some activities to build their understanding and help them make good money choices.
     

    Activity 1: Borrowing isn’t free

    Your child likely understands that if they don’t have enough money for something, they could ask to borrow some to pay for it.

    The next time this happens, offer to lend them money. Decide together how and when they’ll pay you back, this could be by earning money through chores.

    You could set an amount of interest to charge on top if you don’t get all the money back on time. They might decide they would rather save their money than borrow and pay interest.

    This helps them learn that borrowing:

    • Isn’t free, it needs to be repaid.
    • Costs more because of interest.
    • Can cause money worries.
    • Comes with terms, fees, and charges.

    Activity 2: Making money

    It’s important for children to learn that money is earnt. And that different jobs pay different amounts.

    Offer your child money for chores they can do at home. Set different values for how much they can earn, so easier chores like setting the table might earn less than sweeping up leaves in the garden.

    This helps them:

    • Start thinking about jobs they might like to do in the future.
    • Understand that money isn’t free.

    Activity 3: Cards instead of cash

    Cash is a good place for younger children to start learning about money. But at seven or eight years old, your child can begin to learn about the other ways you can pay for things.

    Show your child the cards in your purse or wallet. Explain what the different cards are for and when you use them.

    You can also explain about Direct Debits and standing orders that you use to pay the bills.

    This helps them learn:

    • Debit cards are for spending money in your bank account.
    • Credit cards let you borrow money, but you must pay it back and it might cost more overall.
    • Loyalty cards let you earn points that you can spend in store.

  • Learning the value of money – activities for children aged nine and ten

    Children start noticing the latest trends and advertising more as they grow older. The right lessons can help your child learn the value of money and how to make choices about what to buy.

    Activity 1: Understanding interest

    Learning about interest could encourage your child to save. It can also help them avoid charges from borrowing when they get older.

    Use an online interest calculator to show your child how interest can build up. You could work through an example together. Show them that saving £100 with a bank that pays 5% interest in a year means you’ll earn £5 in interest. So, you would have £105 at the end of the year.

    This helps them:

    • Understand the benefits of saving.
    • Build their financial confidence.

    Activity 2: How do adverts work?

    At this age, children can understand that adverts are meant to persuade you to spend your money.

    When you’re watching TV together and an advert comes on, ask them if it makes them want to buy the product. If it’s an advert for food, do they feel hungry?

    Explain that adverts are created to encourage you to spend your money. Ask your child to think about if they really want the item, or would they rather save for something else?

    This will help them:

    • Think about if they really want the item.
    • Decide whether it’s better to save for something else.
    • Develop better spending and saving habits.

    Activity 3: Is it worth the money?

    Being able to find a good deal and decide if an item is worth the money is a useful life skill for your child.

    The next time your child asks for something, suggest that they look for the best price, think about buying second-hand or consider picking a cheaper alternative.

    They should think about the quality of the item when they look at their options.

    This helps them learn:

    • Shopping around can sometimes help find a better price.
    • Similar items can cost different amounts.

  • Building financial confidence in children aged 11 to 13

    Starting secondary school is a key milestone for children. With new freedoms and pressures, your child might become more interested in money. This is a good opportunity to support their learning.

    Activity 1: Is borrowing worth it?

    At this age, children can start to understand more about borrowing.

    Talk them through types of borrowing that might be available when they’re older, like loans, mortgages, credit cards, and overdrafts.

    If your child asks for money, help them understand their options. Can they use their savings, or do they need to save more to pay for it? If they borrow money from you, are they willing to agree on repayment terms? Could they earn the money from chores?

    This helps them understand:

    • There are different borrowing options.
    • Borrowing might be necessary in the future – but it can often cost more.

    Activity 2: Earning their own money

    It’s good for children to start thinking about how they get their money now and how they might earn it in the future.

    Have a conversation about what they might want to do in the future. If they already have a dream job in mind, talk about what steps they might need do to get that job. You could also explain how different jobs pay different amounts.

    These conversations will help them:

    • Understand that different jobs pay different amounts.
    • Think about the career they might want.
    • Select their subject options at school.

    Activity 3: Learning about financial products

    Help build your child’s understanding of finances by talking to them about the types of financial products that they may need in the future.

    Think about opening a bank account together. A parent or guardian can open a current account for a child when they reach 11 years old. You can talk about whether they’ll earn interest or pay charges, use a debit card, or be able to bank online.

    Ask if their friends have an account, they’ll start to understand that not all accounts are the same. Find out more about selecting a bank account for your child.

    This helps them learn:

    • How to select products to fit their needs.
    • The benefits and risks of financial products.
    • How to budget for the future and make good financial choices.

  • Supporting children aged 14 to 16 to manage their own money

    As your child is becoming more independent, now is a great time to help them learn to manage their own money.
     

    Activity 1: Steering clear of scams

    Anyone can be targeted by a fraudster.

    Aged 14-16, your child might spend more time online and begin to make online purchases. So, it’s important they learn about scams so they can spot them.

    Start by discussing the scams that are happening right now. This will help them stay safe online.

    Learn more in our guide to spotting and avoiding scams.

    Explain to your child how to create strong passwords and the importance of keeping personal and banking details private.

    If they see a transaction they don’t recognise, make sure they know to report it right away.

    For extra guidance, visit Getsafeonline.org and the Citizens Advice Scams Action Service.

    Activity 2: Sticking to a budget

    Taking responsibility for their own expenses is a good way for teenagers to learn about managing their money. By creating a budget, they can start to plan and track their spending and savings.

    Try setting a spending limit for a day out, or an allowance for their school lunches, bus fares, and socialising. Help them work out how much they can afford to spend and how to stick to their budget.

    It could be useful to talk about how you manage your own household budget.

    This will help them to:

    • Learn the value of money.
    • Manage unexpected costs in the future.
    • Build financial confidence.

    For more information on spending and saving, visit our Smart Start hub.

    Activity 3: Understanding payslips

    By now, your child might have a part-time job or be looking to get one. Young people can work part time from 13 years old, but there are rules about what they can do and the hours they can work. You can find out more on the government website.

    Payslips can seem complicated at first, so you could try talking them through their first one. Explain about salary, deductions, and take-home pay. You can also point out other useful information like the payroll number, National Insurance (NI) number, and tax code.

    Doing this will help them:

    • Understand payslips and deductions.
    • Think about the future, for example pension contributions.
    • Manage their own money.

  • Helping young adults as they gain financial independence

    As your child prepares for their future, you’ll want them to feel confident managing their own money. They might want to do their own research, so we’ve put together some advice and guidance to help them find the information they need.

    Information about earning money

    • Once they begin working, they can find out more about their payslips on MoneyHelper.
    • If they’re looking into further education, they should check what student loans they’re eligible for on the government website.
    • They can also find out on the government website what benefits they could be entitled to if they become unwell or unemployed.
       

    Managing money

    Learning to budget is essential, especially if your child is moving away from home for the first time.

    Try our budget calculator to help them explore what they can afford and build good money habits.

    Borrowing money

    Your child may be looking to borrow money for the first time. It’s important that they understand their options and the consequences of having debt to help them make sensible decisions.

    • They should understand the difference between loans, overdrafts, and credit cards.
    • They should be aware that borrowing comes at a cost – they may have to pay more in interest until they repay the debt.
    • They should learn how planned borrowing like student loans and mortgages work.

    It can be difficult for young adults to get a loan for a car or a rental agreement if they don’t have any credit history. You might be asked to be a guarantor. Before you agree, make sure you understand what your legal responsibilities are and what it means for your finances.

Getting started with activities for children aged three and four

A good place to begin is by teaching your child how money works. When you’re out shopping, they’re learning by watching you pay. You could let them have a go at handing over the money, so they can experience spending money just like you do.
 

Activity 1: Learning about cash

Even though we tend to use contactless, paying with cash can help young children learn about the value of money. Having physical money can also help them learn that it’s important to keep money safe.

Let your child play with different coins. You can put them in groups of shapes, colours, and sizes. Then explain how they’re worth different amounts.

This helps them learn:

  • The differences between coins and notes.
  • How pennies add up to pounds.

Make sure to supervise your child while they play as coins can be a choking hazard.

Activity 2: Saving their pennies

Even at three or four years old, your child is starting to understand they have the choice to spend their money, keep it for another time, or share it to help others.

Try giving your child a money jar or piggy bank to store their coins. Then each week, help them count their coins.

This helps them learn:

  • How to store their money safely.
  • How their money grows if they don’t spend it.

Activity 3: Spending pocket money

Your child will have seen you spending money in different places, like at the supermarket for the weekly shop or when getting lunch at a café.

Think about giving your child a small amount of pocket money. Then, next time you go out, help them work out what they could buy with it.

This helps them learn:

  • That once they pay for things, the money is gone.
  • To choose between items they can afford.

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