Understand your child’s money world
From pocket money to part-time work, we examine the different stages in children’s understanding of money, and suggest ways you can help them learn.
We know that talking to children about money isn’t always easy. One of the reasons might be that it’s difficult to know what is appropriate and at what age.
But teaching children about concepts like spending and saving at a young age can help them develop a positive relationship with money in the future. And once you start the conversation, you might be surprised how much your children know already.
We spoke to psychologists, financial education experts and families to find out what your child might be thinking about money and how you can help them learn a bit more, with expert talking points, age-appropriate tips and suggestions from real parents.
When your child is five to six years old: show how you pay for goods with money
I like to count my money, but I don’t like to spend it all as then I won’t have any left!
Starting a conversation about money at age five might feel a little too soon, but research shows that kids at this age are well-aware of how money plays a role in day-to-day life.1
Child psychologist Dr Elizabeth Kilbey suggests that parents can start introducing their children to the value of money at this age, showing them how you can pay for items using a certain about of money, for example.
We pay for a lot of things digitally and using cards. So, when you’re in the supermarket, show your kids the display on the card machine when you pay. You could even get them to guess what it’s all going to add up to, and make it into a game. I also recommend that parents spend a bit of time using cash, so kids can see how it works.
Leading child psychologist
The parent’s perspective:
Kim, mum to five-year-old Jaxon, encourages her son to think about whether he really wants something before buying it, and only gives him pocket money when he keeps his room tidy.
“I’m no expert, but I try to teach him that he can only buy things that he has the money for,” she says.
When your child is seven to 10 years old: teach the difference between ‘need’ and ‘want’
I know that money goes into my bank account, and that it’s being saved for my future
According to financial education charity RedSTART, at this age you can start teaching kids about three key money concepts: earning, saving and growing.
Sue Halewood, CEO at RedSTART, recommends giving your child a structured or regular way to earn money – such as through chores – and teaching them the difference between ‘need’ and ‘want’ in relation to spending money.
No matter how trivial it seems, get your child used to making small choices with their own money, from food items to small toys, so they can understand that these decisions will impact how much money they have left over for other things that they might want in the future.
CEO, financial education charity RedSTART
The parent’s perspective:
Graham’s daughter Isla, 10, is already careful with money thanks to important lessons learnt early on. Graham remembers a time when Isla wanted to buy an overpriced toy that he knew she wouldn’t want later.
“We let her buy the toy, and sure enough she regretted it, but it made her realise that you need to be thoughtful about buying things!” he says.
When your child is 11 to 13 years old: encourage them to regularly check their bank balance
Money is important because it gives us a house to live in and food to eat. And it means I can buy Bubble tea!
Pre-teens are digitally-savvy, with a Childwise report finding that 90% of children have their own smartphone by age 11.4
Fiona Montgomery, Head of Education (School Age) at financial education charity MyBnk, says that as society becomes increasingly cashless, it’s vital that children develop habits that can help them manage their money and remember its value. Particularly at this age, when many of them will be getting their first bank accounts.
Get them into the habit of tracking cash and checking their balance by using a banking app on their smartphone, and teach them the difference between available balance and actual balance.
Head of Education – School Age, MyBnk
Discover more tips to teach your kids about how to look after their finances in our money management guide.5 You can also get inspiration for explaining everyday money terms to them with our list of banking words.6
The parent’s perspective:
Online shopping channels are unlocking a new level of financial awareness in Eloise, 12. She sells her second-hand items on eBay, which dad Nathan says is teaching her the satisfaction that comes with making your own money.
“Eloise is still a bit young for a part-time job, but this shows her there are other ways she can make a bit more than she gets from us,” Nathan explains.
Give your children greater control over their finances with the BarclayPlus bank account and Barclays app7, available to children aged 11 and over. As well as checking their balance, they can set limits on their card, move money between accounts and even personalise8 their card with an image of their choice.
When your child is 14 to 17 years old: help them take responsibility for their own money
Money comes from working hard, and being smart and investing it
This is a pivotal age for your child and their relationship with money, as now they have the chance to earn it themselves. Government research shows that 339,000 16 to 17-year-olds are currently in paid work in the UK.10
Sian Bentley, Moneywise Teacher of the Year winner in 2019, says it’s important to teach teenagers to take responsibility of their own money, taking examples from your own family finances. While you may not want to go into too much detail about this, it can be really valuable in showing them how your monthly outgoings work.
According to Kirstie Mackey, Head of Barclays LifeSkills, educating young people about their finances can enable them to make more informed decisions about money – and their future in general.
“It’s important to start early in supporting the development and learning of money management and budgeting,” she says. “This will help set young people up with good money habits for the future.”
It’s fundamental in today’s world to discuss topics such as online banking and digital currency with young people. This seems to be particularly relevant to them as money trends have been moving away from cash towards a ‘tap and pay’ culture. Exploring opportunities that banking apps can provide like tracking income, outgoings and savings has supported my students to see the importance of money management. Savings is a big topic for us and some of the statistics, for example about how much things cost and what they could afford, shock students and make them think.
Head of Year 9 and SEN Teacher, Preston Manor School
The parent’s perspective
Mark says his 17-year-old daughter Anna is a dab hand at saving and managing money, and that her sensible approach came from having a piggy bank when she was younger, as this helped to teach her the value of money.
Mark also thinks it’s important to get teenagers working. “Encourage them to earn money as early as possible,” he says. “That doesn’t mean just washing your car – get them out into the world!”
For 16 and 17-year-olds, a Barclays Young Person’s account is great for managing money. As well as being free11, safe and packed with features, your child can get easy access to their finances in branch, at ATMs and through our app7.
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