How to talk to your kids about money

How to talk to your kids about money

As a parent, you have a lot of things to teach your children before they develop into young adults. If you want to give them the best start in life, it’s important to teach them the core skills they are going to need.

 

One thing you will want to teach them from an early age is money management. If you teach your child how to save, budget, earn and invest, it will set them up with the financial skills they need in life. So, how do you talk to your kids about money and why is it important? Find out everything you need to know in this brief guide.

Why it’s important to teach your kids about money

Money plays an important role in each of our lives. As an adult, money troubles can impact everything from your stress levels to your relationships. It even impacts your ability to rent or buy a house, and potentially even your career. For this reason, it is crucial you teach your children the money skills they will need.

What should I teach kids about money?

It can be difficult to know what type of things you should teach your children about money. One way you can give them a headstart is by introducing them to GoHenry’s in-app Money Missions — created to help children aged 6-18 learn about money basics, such as earning, saving and investing. 

 

Providing such age-appropriate lessons is crucial. So, what else can you do to teach kids about money based on their age?

Children aged 5-7

At age 5-7, children are ready to start learning about the value of money. It is a great time to introduce pocket money and the concept of saving. You can also teach them about advertisements and how they are designed to persuade you to make a purchase.

Children aged 7-11

Between the ages of 7-11, you can start teaching your children more about savings and spending. Rather than suggesting that they save a set percentage of their pocket money, you can also introduce the concept of investments. This means your child will need to think more about what they are spending, how much they can save, and where their money could be invested to help it grow. This teaches excellent money management skills they can use later on in life.

Children aged 11-14

With children aged 11-14, you can teach them how to be smart consumers. This could include shopping around to make savings and avoiding getting into debt by saving rather than borrowing. Ask them why they are making specific purchases, and encourage them to question their buying decisions.

Teenagers aged 14-16

Teenagers should be given some level of financial independence. This is the time they can start to earn their own money and make independent financial decisions. They will also start to decide what to do with any large sums of money they are given for birthdays or special occasions.

This is a good time to ensure they understand the importance of saving some of their newly-earned money. 

8 ways to talk to kids about money

Ready to start talking to your children about money? Here are some great tips you can follow…

1. Cover the basics

When you start teaching your children about money, it is important to start with the basics. What is money, how is it used, and who invented it? What are the different types of payment methods used today and what is the difference between a credit and a debit card?

 

Teach your kids these important money basics with our fun, age-appropriate in-app Money Missions

2. Explain how you make money

Discuss the different ways you can make money, such as getting a job or investing. Talk about how you make your money and what they can do to make money now, or when they get older. This teaches your children that money is earned and that it can also be used to generate more money.

3. Talk about values

You don’t have to tell your children how much you earn. What they need to know is the concept and value of saving, earning, budgeting, and giving. So, talk to them about the value of money and what it means to earn it. Teach them about financial responsibilities and how money can be used to help others.

4. Explain how earning, budgeting, spending, and saving works

As part of their financial education, children need to understand how earning, budgeting, spending, and saving works. Teaching them about budgeting isn’t always easy. However, there are resources out there to help. At GoHenry we have you covered. Our in-app Money Missions teach kids about earning, budgeting, spending, savings, and all things personal finance related.

5. Invite them to help with some family spending decisions

What better way to teach your children about money than by giving them real-world experience? Why not let them join you for some family financial decisions? They will see how you need to manage money to run the household. They will also learn when to prioritise spending and saving.

6. Talk about pocket money

Giving your children pocket money is a great way to develop their money management skills. It's not really the amount of pocket money you give that matters; simply giving regular pocket money helps children learn how to budget and manage their money. You can use GoHenry’s app to set paid tasks, making it an easy and convenient way to manage pocket money.

 

Many parents choose to provide pocket money in exchange for chores. This teaches children about earning money from an early age. No matter how old your child is, there are age-appropriate chores they can do in exchange for pocket money.

7. Understand their spending mistakes

There will be times when your children make spending mistakes. Whether they have spent money rather than saving it, or they have run up a high bill, stay calm and accept that they will make mistakes at first. Making sure that they learn from it is the main thing. Explain that we all make poor financial decisions sometimes and how they can use the experience to avoid making the same mistake again.

8. Educate them further

There are plenty of tools out there to help you teach your kids about money. Why not enlist the help of fun, interactive apps and games? You will find a huge range of apps available, including our very own GoHenry app. Whatever age range your children are, there is an app they can use to teach them all things money-related.

How can GoHenry help your kids learn about money?

At GoHenry, we are passionate about teaching kids everything they need to know about money. We offer a unique monthly membership service that includes a prepaid debit card, app, and a range of money lessons and features. All of this is included for just £2.99 a month.

 

 

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Written by GoHenry Published Apr 30, 2021 ● 6 min read