Helping your kids to become financially literate doesn't have to be dull. At GoHenry, we know financial information is more likely to stick if you make it fun for younger kids and relevant for teens. So here are the best activities to help your kids become financially savvy.
A recent study into the effect of financial literacy found that prioritising financial education could add nearly £7 billion to the UK economy each year. The result of empowered kids knowing how to make smart financial decisions for life. It’s one of the reasons why GoHenry with the CBI are calling for the government to prioritise financial education for kids and teens.
Louise Hill, co-founder and COO of GoHenry, agrees: "While it can be daunting to approach financial literacy, the sooner you can teach your kids about money and help them understand the wider financial picture, the more future-proof they will be."
The reality is all kids need a solid financial education to help them navigate the challenges of their future: from paying off their student debt to understanding taxes and even buying their first home. Money confidence comes from helping them fine-tune a range of practical financial skills, from saving and spending to budgeting and investing.
Introduce kids to money-based games
According to the University of Cambridge, money habits are set by the age of seven, which means that parents have the real power to foster financial literacy at home. With younger children, what helps are money-based games.
These games make learning about finances fun and simple for children. They can teach kids about spending responsibly and also help them understand how money works. In the GoHenry app, you’ll find Money Missions to help kids learn everything they need to know about finances. Money Missions are designed to make financial education fun, building confidence, literacy, and curiosity in 6-18-year-olds. Kids can watch animated videos, take quizzes and earn points and badges as they progress through the levels.
As play is one of the main ways younger kids learn and develop, it’s worth finding money games that appeal to your child. Younger children may prefer an app-based game like Toca Store, while older pre-teens may prefer board games like Game of Life or a video game like Minecraft. You can also create your own games as incorporating money ‘lessons’ into everyday life is fun – and easier than you think.
Louise suggests: "If you're taking kids to the shops, use it as an opportunity to talk about wants and needs. There are many simple ways to do that and bring that to life for children so that it's meaningful without having to go into complicated details. One approach could be asking youngsters to choose between a well-known brand and own brand and explaining the difference between money saved."
Get them a prepaid debit card
Giving regular pocket money on a GoHenry prepaid debit card is a great way to teach financial literacy. Start by giving your child a set sum each week and asking them to use this to buy what they need and want. With older kids, introduce budgeting (can they make their pocket money last all week without asking for a top-up?) and saving (are they able to delay gratification for a few weeks to buy those much-wanted trainers?). Activities like these will help them to build smarter money habits.
You could also create ways for older kids to earn their pocket money (or more money) with tasks such as helping around the house, cleaning their room, doing their revision and walking the dog.
"Many parents say their child's behaviour has changed since using the card. They suddenly want to do chores around the house to earn more money to buy something, or they change their mind about how much they 'desperately' want something when they realise it will wipe out that entire week's pocket money. It introduces them to the decisions they will have to make as adults but in a safe environment."
Louise Hill, co-founder and COO of GoHenry
Have them help you plan spending & budgeting
As life is becoming even more cashless, coins and notes can easily confuse children and teens. So another good financial activity is getting kids comfortable with handling money and budgeting money when you are out and about shopping.
With younger children, show them how money is used when you're in the supermarket and let them pay for items and collect the change. Also, explain that money must be earned before it can be spent and doesn't just come out of an ATM whenever you need it.
With older kids, talk to them about budgeting and saving. For example:
- Needs versus wants and the benefits of budgeting and saving for something they want.
- Ask them to go shopping and look for the cheapest items on the list to see how much they can save.
- Pros of cash, coins and notes: you know exactly how much you’re spending; handing over cash makes you think harder about purchases, so it's easier to save money.
Introduce them to the concept of investing
Talking about how you earn and save and invest your money is a great way to inspire your children. A great way to introduce children to investments is with a game such as Monopoly. This teaches kids about using money to invest in property and the returns they can make.
Also, look at GoHenry’s very own in-app Money Missions. This collection of interactive games is a fun way for children aged 6-18 to learn about investing, compound interest, and more.
Get them started making money with a part-time job
Alongside this inspire kids’ entrepreneurial spirit with a part-time job as this is also a fantastic way to increase financial literacy around more complex financial lessons, such as earning especially for teens. Our latest Youth Economy Report shows that 1.33 million UK kids (13%) are now making money from investing in cryptocurrency, and a quarter of kids and teens (25%) are currently earning from selling things on online marketplaces such as Etsy, eBay, Depop and Vinted.
These ventures can inspire all kinds of bigger financial conversations and discussions around low-risk investments (banks and GoHenry) and high-risk investments (cryptocurrency and NFTs), pricing, interest rates and tax on earnings.
Above all, whatever financial literacy activities you choose to do always make them relevant to your kids’ lives because this will spark your child's interest in financial literacy and keep them learning for life.