Why is it important to teach children about money?
Teaching children about money equips them with the knowledge and skills they need to manage their money effectively now and in the future. Children who do better with money tend to have parents/carers who talk to them about money and show them how to complete money related tasks. Having conversations about money builds children’s confidence on the subject and helps to develop their financial skills as adults.
When should parents/carers start to talk to children about money?
Children and young people start developing vital attitudes and money skills by the age of 7. So the sooner you start developing their financial skills, the sooner they can start to hone those skills.
What should I teach about money?
All children are different, but there are some developmental milestones that can help guide what to teach them and when:
1. Three and four-year-olds: You can start teaching pre-schoolers about money from when they start to talk and ask questions – when they touch, investigate and play with everything: For tips, visit How to talk to three and four-year-olds about money.
2. Five and six-year-olds: They’re starting to develop a deeper understanding of numbers and will be able to pay attention for longer. This makes it a great age to move from playing to showing good money management. It will still need to be fun – but you can start integrating more money-related skills into everyday life. For example, saving for a new toy or turning shopping into a learning experience. For tips, visit How to talk to five and six-year olds about money.
3. Seven and eight-year-olds: They’re beginning to understand the difference between wants and needs. This is a great age to talk about how they can start achieving some of their own wants through earning and saving. For tips, including the power of pocket money, visit How to talk to seven and eight-year olds about money.
4. Nine to 12-year-olds: At this age, children want independence. So you can focus on getting them to take responsibility for their own spending and saving choices. Helping them learn about how to be responsible with their money can also give you peace of mind as they become more independent in their decision-making. For tips, visit How to talk to nine to 12-year-olds about money.
5. Teenagers: When a child becomes a teenager, their aspirations will be bigger – and more costly. From thinking about what they wear to wanting the freedom that comes from learning to drive, this is an age when money really starts to matter to them. You can help them become moneysavvy adults in three main ways:
1. giving them financial responsibility
2. setting the right example
3. helping them manage their first wage.
For more information and tips on these three approaches, visit How to teach teenagers about money.
6. Adult children: Conversations about money don’t stop when children become adults. Whether they’re still living with you or have their own place but are struggling to save for a first mortgage or pay off credit card debts, money is a topic that often needs revisiting. Find out more: How to talk to grown-up children about money.
Wave Community Bank’s Young Savers accounts are a great way to start your children saving and our Smartcash accounts can help them manage their pocket money with a VISA debit card and mobile app so you can track spending.
