Money makes the world go round \u2013 and that\u2019s why children need to learn about it as soon as they possibly can.<\/p>\n
Research shows children who\u2019ve had some financial education at school are more likely to save up frequently, have a bank account, and be confident managing their money. In November last year, the government confirmed that financial literacy will become a mandatory part of the national curriculum in England for both primary and secondary schools from September 2028.<\/p>\n
In the rest of the UK, financial education tends to be integrated into the maths and\/or social studies curriculum.<\/p>\n
But no matter what kids learn about money at school, they need to become more familiar with it at home, according to financial experts.<\/p>\n
\u201cIt\u2019s so important to let kids get hands-on with money and build up their skills at home from an early age, as research shows that money habits are already formed by the age of seven,\u201d says Louise Hill, founder of the prepaid debit card and financial education app for young people GoHenry.<\/p>\n
\u201cApproaching these topics might seem a bit daunting, but the truth is, early money lessons don\u2019t need to be serious or formal \u2013 it\u2019s actually quite easy to turn them into a bit of fun.\u201d<\/p>\n
And father-of-two Rajan Lakhani, head of money at the personal finance app Plum, stresses: \u201cTeaching kids about the value of money as soon as possible is very important. The habits, attitudes and understanding they develop from a young age can have a big influence on how they approach money matters in adulthood.\u201d<\/p>\n
These are the things the experts say children need to understand about money\u2026<\/p>\n
1. The value of money<\/p>\n
Young children can learn about the value of money through fun role play like setting up a play shop, says Lakhani. He suggests displaying toys and pretend groceries, and using coins labelled with different values, and then taking turns playing shopkeeper and customer.<\/p>\n
He played this with his daughter, and says: \u201cThe pretend transactions helped her see that our weekly groceries didn\u2019t come for free and how to not overspend, as well helping her improve her basic addition and subtraction skills.\u201d<\/p>\n
This is linked to showing them that shopping costs money, as with the rise of contactless payments and online banking, it\u2019s harder for kids to see how money works, where it comes from and that things cost money, Lakhani points out.<\/p>\n
\u201cIf you pay with a debit or credit card, explain how it works \u2013 even though you\u2019re not using cash, the money is still coming from what you\u2019ve saved in your bank account \u2013 and let them see you making purchases with cash when possible.\u201d<\/p>\n
2. The difference between needs and wants<\/p>\n
The experts say this is one of the most important money skills, and there are lots of simple ways to introduce it to children. One of the best ways, says Hill, is by weaving money lessons into daily life, perhaps by letting the kids lead the next weekly food shop.<\/p>\n
\u201cSet them a budget and challenge them to stick to it,\u201d she suggests. \u201cThis will help them understand what the essentials are and why you can\u2019t always have that extra treat or a new toy. If it\u2019s something they really want, it\u2019s time to start building up their savings pot.\u201d<\/p>\n
And Lakhani suggests making a list of what people need and what they want, and using it to discuss the difference between wants and needs.<\/p>\n
3. The benefits of saving<\/p>\n
Understanding the difference between needs and wants can lead to learning about saving. It\u2019s a concept that can be difficult to understand, especially for younger children, so Lakhani suggests using practical examples to help.<\/p>\n
He says his eldest daughter had some birthday money and found a toy she wanted to buy but he explains: \u201cI could see she only wanted it so she could spend the money, rather than it being of value to her over time. So I said she could grow her money if she saved, like mummy and daddy do.\u201d<\/p>\n
He says his daughter\u2019s US$15 was eventually worth US$20, so she could buy the toy she really wanted, helping her associate saving with goal-setting.<\/p>\n
\u201cIt\u2019s teaching them about delayed gratification and why saving is a good thing,\u201d he explains.<\/p>\n
Hill says adding an element of fun to learning about saving is a good way to keep kids engaged, and suggests trying to recreate a \u2018fakeaway\u2019 meal at home instead of a meal out, or having a home movie night rather than a trip to the cinema, and working out how much money you save.<\/p>\n
\u201cThis will help show kids how saving a little bit here or there can slowly add up to the bigger item they\u2019ve been saving their pennies for, while also helping keep family budgets in check,\u201d she says.<\/p>\n
4. The connection between hard work and earning<\/p>\n
Hill suggests focusing on simple everyday things like earning and budgeting with the help of children\u2019s pocket money.<\/p>\n
\u201cPocket money is one of the simplest \u2013 yet most effective \u2013 places to start,\u201d she says.<\/p>\n
\u201cIt isn\u2019t about how much you give, it\u2019s just about being consistent, and that\u2019s what helps kids build up good money habits, which they\u2019ll take with them into adulthood.\u201d<\/p>\n
She suggests linking pocket money to chores such as tidying their bedroom can help teach kids the connection between hard work and earning. \u201cIt helps them understand that money has to be earned and doesn\u2019t just magically appear online, on a bank card or at an ATM,\u201d she says.<\/p>\n
5. How to keep money safe<\/p>\n
The best way to help children learn this money lesson initially is by giving them a piggy bank to store their money in, says Lakhani. This can be replaced by a bank account as they get older and have more money.<\/p>\n
\u201cGiving a child a piggy bank gives them a safe place to store their money, and parents an opportunity to talk about why it\u2019s important to keep money safe,\u201d he explains.<\/p>\n
It\u2019s important that a piggy bank or savings jar is transparent so you and the child can see the money growing, he says. \u201cHaving that clear view is essential. You can then congratulate them for their success in building their money pot.\u201d \u2013\u00a0By Lisa Salmon\/dpa<\/p>\n","protected":false},"excerpt":{"rendered":"Money makes the world go round \u2013 and that\u2019s why children need to learn about it as soon…\n","protected":false},"author":2,"featured_media":526418,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[39],"tags":[28,151,170681,2066,147,530,3415],"class_list":["post-526417","post","type-post","status-publish","format-standard","has-post-thumbnail","category-personal-finance","tag-business","tag-children","tag-financial-management","tag-money","tag-personal-finance","tag-personalfinance","tag-savings"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/526417","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=526417"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/526417\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/526418"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=526417"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=526417"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=526417"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}