Fun ways to teach your kids to understand money

Shopping

If you go to the shops, take your kids with you – they learn by watching what you do. Involve them in the following conversations:

• Compare prices or ask them to tell you the different prices of products
• Explain why you are making certain money decisions – such as choosing an own brand item rather than a branded item
• If you hand over cash to pay for your items, why not ask your child to pay for you and explain that they should count the change they are given afterwards before leaving the shop
• Why not set a spending limit for them – give them a bit of money to spend on something they may want such as chocolate or treats for their packed lunch. Help them work out how much they have and what choices they have to spend it on

Familiarise them with money

Nowadays, a lot of money is digital. This can make understanding the value of it quite difficult. Make money tangible for children so that they can gain confidence around using it.

• Let them see coins and notes, as well as credit/debit cards
• Use piggy banks for their own cash that they can earn by doing jobs around the house or other age appropriate tasks as described in our previous blog
• At the end of every month, tip the contents out and count them together
• It is a good idea to discuss what the savings could be spent on and what the monetary goal is
• For younger children, play shop with them using real coins. Put prices on items and get them to hand over coins in exchange for the item

For older children, get them to familiarise themselves with digital money and the apps that help you to manage your money. They need to be able to build confidence using money this way. A great way to do this is to show them your bank account balance before you purchase something. Then show them the balance afterwards to illustrate the difference.

Counting

Use coins to help small children learn to count. Get a pile of 1p, 2p, 10p, etc, count as you build piles and then smash them down!

After this, why not try coin rubbing? Put coins under paper and gently rub a wax crayon over the paper until the coin pattern comes through.

Days out

It is a good idea to start letting your children know that days out cost money, especially once they start becoming more familiar with finance.

School holidays can be a very expensive time with activities booked in order to keep the kids occupied. Before the holidays start, make a list with them (include limits!) on what activities they would like to do. Set up a jar and put an allowance in there. Explain to the kids that once the jar has emptied, there will be no more allowance given and this is the money that will pay for certain items when out and about. Keep discussing the jar and how much is left throughout the holidays – this will help older children with their budgeting skills.

With Christmas around the corner, now is a really good time to put a budget in place for them. A lot of kids, especially school age, will want to buy presents for their friends. Sit down with them, set a budget and draw up some ideas. Explain to them that if they do not have enough budget for all their friends, then they need to compromise and adjust their expectations.

Or suggest saving for something bigger from now until Christmas.

• Discuss with them what they really want but their pocket money wouldn’t stretch to
• Help them work out how long it will take them to afford it if they save all, half or a quarter of their pocket money each week
• Help them decide their best savings option, then make a progress chart to keep them motivated
• Praise them when they reach their goal

TV and gaming

For younger children, the TV is a great aid in helping to understand money.

CBeebies Numberblocks is a great aid where your child can sing along to numbers. There are also CBeebies Numberjacks available which is a programme with superhero numbers with different characteristics.