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Talking to kids and young people about money

When you brought a child into the world, you may not have fully realised the responsibility of raising this little human from a baby to a sensible adult. Teaching them how to walk, communicate and ride a bike are all an important part of growing up, but did you consider preparing a lesson on money?

We are not born with the skills necessary to navigate through society and from an early age we are taught a range of different subjects and social norms by our parents and teachers. Sadly, there is very little guidance on how to develop good financial skills and as a result, many young people commit the same financial mistakes their parents made when they were young.

Taking ownership of your child’s financial education is not difficult and can set them off into the world on the right foot. People who were offered support and guidance on financial matters as children are more likely to be better equipped when having to make financial decisions as adults. In comparison, kids who have less financial literacy can develop a destructive relationship with money that spans into an adulthood shadowed by financial dependency and debt.

When can I start talking to my kids about money?

Talking to your children about money will be an ongoing conversation as building healthy habits can take a lot of effort and patience. It’s never too early to start teaching lessons about money, however the way the information is presented should be age appropriate.

Children aged 3 to 5

At this age you can introduce children to simple money concepts like spending and saving. You are most likely to achieve results by using interactive physical objects to get them excited about the activities. For example, you may gift them their first piggy bank or money jar and teach them to collect the spare change and save it for small purchases like sweets. Next time they plead for candy, you can ask if they have enough money to pay for it themselves and help them count the savings before going to the shop together.

Children aged 5 to 10

Kids begin to grasp the concept of spending and saving well between the ages of 5 and 10. In this age range kids are likely to have picked up on subtle cues given out by mum and dad on their relationship with money and may have already began to form their own perception of money based on their environment.

This is a good time to teach them about the value of money. You can introduce various activities through which they can earn money, for example by gathering their toys after playing or by watering the plants. Allowing kids to choose what they do with the money will help to consolidate concepts such as the trade-off between immediate spending and saving towards a more expensive purchase.

Giving them the chance to pay for something small on your weekly shopping trip will teach them that once spent, the money is gone. In addition, encouraging them to save towards something they really want will allow them to understand the value of money in practical terms.

Children aged 10 to 16

As they go through secondary school kids are likely to have more expenses and reinforcing the idea of budgeting can go a long way in preparing them for later in life. Allocate a weekly or monthly allowance to your child and explain that this money will have to last them for the entire period. Help them come up with a budget that covers their basic expenses and set aside some money for something costly that they really want.

Thankfully the development of technology has made learning about money engaging and interactive. The online banking app gohenry is specifically designed for introducing money concepts to youngsters. The child gets a personalised gohenry debit card which allows them to spend money that their parent transferred into their account. The gohenry mobile app also allows the parents to manage automatic or one-off transfers, set spending limits, choose when and where the card can be used and set weekly tasks to encourage children to earn extra money. The service has a one month free trial period, after which you can carry on using gohenry for a small monthly subscription.

You also can teach children about regular utility bills by showing them a real-life invoice. Examining the electricity bill together gives you the opportunity to answer your child’s questions and can easily be turned into a fun challenge for the whole family. Explain that working together to cut back on your electricity usage can reduce the amount of money owed at the end of the month, then encourage behaviours such as turning off the lights. Next month, compare the bills together to check if your challenge was successful.

Young adults aged 16 and above

When youngsters transition into young adults, their understanding of the world around them deepens and this is a critical time to build more sophisticated money skills and practices.

This is the age when your child will be opening their first bank account and talking about skills such as budgeting, saving, managing debt and being self-reliant is essential. Instead of allowing them to solely rely on the safety of their monthly allowance, encouraging them to get a part-time job will help them to acquire some extra funds and to recognise the value of earning and spending money.

There are six major financial areas that need to be discussed with young adults to prepare them for taking the world on their own – Budgeting, Short-term savings, Pension pots, Use of credit, Making large purchases and Investment choices.

Teaching young adults how to spend their money efficiently, to ensure that all their priority bills are covered, and they have some money left over for rainy days is one of the most important skills they will learn. Encourage them to maintain a short-term savings reserve of at least 3 months income and redirect other disposable income towards saving for a large purchase or a pension fund.

You can also teach them a lot by including them in discussions around regular financial decisions you make, for example showing them how to look for better deals on insurance and utility bills and discussing how much money was saved.

Talking about borrowing money and managing debt is especially important for young adults who are thinking about going to university or entering the workplace. Explaining the major features of the different types of credit will be beneficial later in life when they have to make big financial decisions, such as applying for a student loan or saving for a deposit on a mortgage, on their own.

Breaking down more complicated topics like investment opportunities and mortgages into easily digestible content will help young adults gain an overall perspective of the financial sector earlier on so they have the foundation to build on the knowledge later in life.


There is no doubt that children who receive sound financial education are more prepared to make good financial decisions as adults and it all starts with you. From learning at a young age through fun games to actively managing their own budgets as adults, your kids’ financial literacy is one of the most important gifts you can give them as a parent.

More Information:

A guide to managing your money: Budgeting

Top Money Management Tips

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