Explaining money to children header image

The Money Explained series tackles the basics of family finance. Here, we look at some of the ways that a parent or guardian can explain money to children.


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Use moments in daily life to teach your children what you really get in exchange for the money you spend. It could be tapping your card to buy vegetables in a supermarket, paying for a bus trip with Apple Pay on your mobile or using Starling’s Settle Up feature to request money back after lunch with another family.

If your children have Starling Kite, a debit card for kids, then it’s their own spending moments you can discuss.

Conversations about money

Explain to children from an early age that a bank is somewhere you keep your money safely until you’re ready to spend it. How much you have to spend depends on how much you put in there, usually from what you’ve earned. Talk about the fact that in exchange for work, you’re paid, and that money doesn’t come for free. So when you spend it, you need to make careful choices.

Children often learn best through doing, so for younger children, perhaps get them a piggy bank to keep money in and for older kids, their own Starling debit card.

Give them responsibility for their own money

If you can afford to, you could give your children pocket money or an allowance and start conversations about what they plan to do with it. A sense of ownership can help them feel responsible. If the pocket money is in return for chores, it can also help show how money is something they have to work for.

Learn from mistakes

Be prepared to let them make some spending mistakes. Let them follow through with their choices, including splurging all their money in one go if they choose to, as long as their choices are not harmful. Giving them this freedom at a young age will help teach two valuable lessons: the importance of budgeting, and once the money is gone, it’s gone.

The importance of waiting

If children want to buy something they can’t afford now, teach them that they will need to save up. Successfully saving over time can help children to learn the value of sticking with something to get what they want.

Explain your own choices

With limited money, we have to make choices. Shopping for clothes is a great opportunity for teaching this, and the difference between wants and needs. They might need a coat to stay warm, but want the latest trainers to stand out to friends.

New and second hand

Holding or visiting a car boot sale is a good way to help children understand the concept that second hand items usually are worth less than new. It can also be a good way to learn about picking up a bargain on toys, games or books.

The above article is intended as general information and doesn’t constitute financial advice. You should take independent financial advice if you have any questions about your specific circumstances.

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