What to talk about and when
Whether or not your child is learning about money at school, making sure they have experience of handling money at home will be invaluable in the long-term.
Here are some ways you can introduce the topic of money and financial responsibility throughout the ages.
Every child is different and will learn at their own pace but it's good to get an idea of the conversations you can be having with them as they grow.
Age 3: Where does money come from?
After the terrible twos many parents find that their child becomes a never-ending source of questions. However, these questions can provide a perfect opportunity to explain the basics of money.
When your child asks why you have to go to work, let them know that in exchange for work you receive money that you can use to buy toys.
There’s no need to overcomplicate things at this age, you’re simply starting to lay the foundations about the role money plays in life.
Age 4: The value of numbers
With an elementary understanding of numbers, it’s time to go over counting and values.
Whether it’s real money or taken from a board game, explain how much they will need to buy their favourite sweets, how much for a toy and how much for the whole family to go on a trip.
By seeing numbers and banknotes, and giving them an equivalence, children will begin to realise that some purchases cost more than others.
💡 Top tip 💡
Remember that these days, children are growing up in a world where money is largely digital. When you make purchases, try showing them your bank balance on screen to help them make the connection between digital money and real money.
Age 5: Avoiding instant gratification
Children constantly asking their parents, and grandparents, for treats, snacks and toys is part of growing up. And as frazzled parents, it’s all too easy to give in to their demands.
However, it’s never too early to teach that the best things come to those who wait. Explain that if they want X and Y, they will have to go without Z.
Depending on what your child wants, you could give them a certain level of autonomy to choose their options and what they’re prepared to go without.
Age 6: What about pocket money?
When you give your child an amount either weekly or monthly, it helps teach them how to manage money from a fixed, regular income.
Talk with your child about what they’d like to buy with their money, stressing the importance of saving for larger purchases.
Both paydays and purchases are great opportunities to teach. Don’t forget that pocket money should be discretionary and is not a right.
Age 7: Thinking about the future
Firefighter, doctor or astronaut; for many children it’s an age when they dream of what they want to be when they grow up.
Help them understand the relationship between earning a wage and spending in simple terms by talking about the household budget and how you need to keep expenditure at a level below what you earn.
