How to teach your kids about money:  An age-by-age guide​

Child With Piggy Bank

The past year has been like no other, with the pandemic impacting families across the country and many parents taking on home-schooling responsibilities overnight.

And although children may now be back at school, there are still a number of lessons that parents might want to keep on the home-school timetable for when they have a spare moment with their kids. One of those being ‘the value of money’.

The subject might seem quite daunting, particularly when children are at a younger age and have little to no understanding of how money works. However, we think it’s important that kids learn to feel confident when it comes to money from as early as possible.

So, to coincide with My Money Week – a national campaign to help educate children on all things money – Sally Conway, Head of Consumer Communications at Shawbrook Bank, has created an age-by-age guide to give parents a helping hand with their lesson plan.


Ages 5 – 6: Learn the basics

The focus for this age group should be about laying the foundations for future years, and familiarising them with the concept of money: what is it, how do we earn it and why do we need it?

Start educating your child on basic money terms by engaging them in a way they understand. Begin by asking your children simple questions, such as what do they think money is used for, or how much do their toys and activities cost.

Next up, create opportunities for children to earn some money (it does not have to be much) of their own by setting small chores, so they begin to understand the value of money. You could also give your child supervised responsibility by allowing them to spend some of their earnings on a monthly treat, for example, so they begin to understand how money is used.

If you’re in a position to set money aside, consider opening a junior ISA and pay small sums into their account in exchange for weekly chores to demonstrate how money is earnt.

The key is to make it simple and as relatable as possible so they can grasp the basics in a way they’ll easily remember.



Ages 7 – 9: Build on foundations

Once your child understands some basic terms, begin building on the foundations by teaching them about the importance of saving.

If your child really wants a new toy, but their pocket money doesn’t cover it, help them work out how long it would take to buy it if they saved a proportion of their money each week.

You could even encourage them to save into a savings account that you can set up for them. It might give them a sense of responsibility too, and you can show them how to manage it in practice rather than theory.


Ages 10 – 13: Set savings goals 

By this age, your child should be familiar with the concept of money. You could now challenge them to think about working towards bigger savings goals. Help them to keep track of how close they are to that goal, showing them how saving over time will provide bigger rewards and benefits down the line.

It’s also important to teach your child the importance of a rainy-day fund. When they are slightly older, get them into the habit of putting a proportion of their pocket money away into a savings account or building society, so they can get used to the concept of setting money aside in the future. Roughly a fifth, or 20% is standard good practice.

When your child is approaching secondary school, you can also begin to introduce the idea of bank balances and debit cards. Demonstrate how your bank balance is linked to a debit card by showing them the amount before and after purchasing school essentials such as new uniform and stationery, so they can start to understand the need to budget and spend wisely.  



Ages 13+: Give them more control

Children at this age should now be able to use simple calculations to understand how to plan a basic budget and manage their finances. Now is the time to give them a little more control of their finances.

From age 13+ most banks allow children of this age to open and manage their own savings account This may also be a good opportunity to explain the basics of interest rates and account fees in a way they can understand, so they’re well-prepared for their financial future.

Pre-paid cards can be a great way to give children a sense of autonomy without relinquishing full control. These cards allow children to learn more about saving and spending independently, while parents can set spending limits and oversee via an app from afar.

Finally, children learn by example so it’s important to maintain good financial habits yourself that they can learn from. As they start to face more expenses – whether that be school dinners, phone bills or bus tickets – demonstrate adopting a weekly budget, putting a proportion of money into savings, avoiding splurging unnecessarily, and how to manage your money in a responsible way when it comes to borrowing.