The five pillars of money header image

The Money Explained series tackles the basics of family finance, including lessons for the kids. 


When it comes to talking about personal finance, there’s often too much jargon used. In fact, if we take it back to basics, things can be very simple.

Here we’ve broken down the topic of money into five pillars. There are certainly other pillars we could have used. But here’s one way that helps keep things simple.

Earning. One of the most basic lessons about managing money is that there’s nothing to manage if you haven’t earned it in the first place (except in the event of things like birthday gifts or inheritance). 

Your children may already have experience of earning if they do chores for pocket money, or have a part-time job if they’re older. They may have seen you working from home, perhaps during lockdown, which showed them first-hand how you’re earning.

Conversation starter: Ask your kids about all the ways they could think of earning money now, and see if they know how you earn your money.

Saving. Once you’ve got money coming in, one thing you can do is save it for later – for example in Spaces, a feature in the Starling app where you can ring-fence money from your main account. Not spending your money straight away, could mean that you can buy something later, that you can’t afford now.

With your child, set a target amount and offer to match what they save. Or perhaps add a percentage of what they save, 20% or 50%.

Conversation starter: See if your children have their eye on anything like a new toy, video game or clothes. Talk about how long it might take them to save for it, if they saved £1, £2, £5 a week.

Growing. Some people aim to save a set amount of whatever they earn, and others use the money they’ve put aside to try and make more money by growing it. This might be done by placing money in a savings account that carries interest (although inflation can have a negative affect). Other people hope to grow their money by investing in things like stock market shares, or bonds that carry interest.

It’s important to remember with all investments, that your capital is at risk and the value can go up or down. This means you could get back less than you put in.

Spending. Of course, it’s not possible to save all the money you earn. You need to spend some of it on things like food, bills and clothes. It’s important to create a budget, detailing what you plan to spend on the different categories so that you don’t spend more than you have. In the budget, separate the things that are needs (such as bills) from the wants (for example, entertainment).

Conversation starter: Talk about the different things you spend money on, and see if there’s anything your kids have bought recently. If they have Starling Kite, a debit card for kids, you could show them in your Starling app what’s been spent and how different spending is categorised.

Giving. This can be a great way of helping others, and for many people, giving is a vital part of money management. There are different ways you can give: for example by sponsoring a friend’s bike ride or bake sale, or putting money in a charity box. 

Other ways to give include using some of your spare time to volunteer in your local community, setting up your own fundraising events for charity or donating old toys or books.

Conversation starter: See if there’s anything your children own that they’d be willing to give away tomorrow.

In summary, you earn money and can then split it between the four other pillars. How you choose to divide the money is up to you.

Conversation starter: Sit down with your kids and say each of them has earned £50 - how would they choose to divide up the cash?

Once you’ve talked through these five pillars with the family, you could try having another chat about other pillars you might add to your list.

The above article is intended as general information and does not constitute advice in any way. You should take independent advice if you have any questions about your specific circumstances.

Read the other articles in our Money Explained series.

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