Teaching kids about money {Ultimate how-to guide}

Teaching kids about money {Ultimate how-to guide}

When it comes to understanding money, kids are smarter than you think. According to research by the UK government's MoneyHelper service, by the age of 7, most kids understand the value of money, the basic concept of delayed gratification and that certain decisions may cause them problems in the future. 


Research shows that over half (51%) of people who received financial education as a child have up to £5,000 cash savings compared to 40% of those who didn’t receive financial education saying they have no savings at all and can’t afford to save. If you want to help futureproof your child’s finances here’s how to teach them about money.


Related: Financial literacy for kids

Why is it important to teach kids about money?

Money plays a huge role in our lives and can affect our relationships and general wellbeing. Teaching kids about money equips them with the confidence, knowledge, and skills to manage money effectively both now and in the future. According to GoHenry's latest Youth Economy Report, three-quarters of young people already recognise the importance of sound financial skills, saying they believe good money management skills will help them in their careers. Therefore, the sooner you start teaching kids about money, the sooner they can build their financial skill set.


How does talking about money help?

Of course, like anything you teach your kids, it’s important to do it in an age-appropriate way and in a way that sticks and helps them gain knowledge. Simone Gnessen, a Money Coach & Financial Life Planner at Wise Monkey Financial Coaching and co-author of Sheconomics, agrees,


"Part of the problem is money is such a taboo subject in our society and even in the home. To help your children understand and not be fearful of it, include them in conversations about money, spending, lack of affordability and creative ways to resolve financial issues."


Knowing how to talk to your kids about money is key, so start by ensuring you are equipped with answers to the common questions kids ask about money & are able to debunk any money myths they might have heard. Alongside explain key financial terms and phrases that they will come across in their everyday life, from debit cards to inflation and the stock market. All these elements will help make your child financially literate.


And remember, says Simone, "All kids learn by observation; the wider the gap between your financial intentions and actions, the more confused they will be about how to manage money. Being a good role model is not only about what you say but also how they see you behave around your finances."


Related: Quotes to learn the value of money, Money facts for kids

What should I teach my kids about money?

The key to successful understanding is using age-appropriate methods to pass on information. What works for an early years learner won’t work for preteens, and what works for them won’t work for teens. Here’s what you need to know at every age.


Related: Financial milestones by age

5 to 7-year-olds

From the age of 5 to 7, your children will have likely started to develop a deeper understanding of numbers and begin learning about money at school. It's a great age to begin developing their understanding of money management.


Sam Sims, Chief Executive of National Numeracy agrees and says: 

“If you want your children to feel confident managing their money, one of the best things you can do is to build their confidence with numbers. Feeling confident about the numbers will help them to make better decisions about how to save and spend their money. Numbers are a normal part of everyday life, and they don't have to be scary. Learning to use numbers is a skill everyone can practise and learn, just like learning to dance or play a game. The more you practise, the more confident you get, and the easier it becomes."


Read our money guide for 5 to 7 year olds

7 to 11-year-olds

Between ages of 7 to 11, most children will become consumers for the first time and begin to understand the difference between their wants and needs. So it’s the ideal time to encourage them to start thinking about achieving some of their ‘wants’ through saving and earning.


Read our money guide for 7 to 11 year olds

11 to 14-year-olds

From age 11 to 14, children usually start to want more independence, and you can support them by encouraging them to take responsibility for their spending and saving choices.


Read our money guide for 11 to 14 year olds

14 to 16-years old

When a child hits 13 and becomes a teenager, they tend to have bigger and more expensive aspirations and money starts to matter to them more.


Read our money guide for 14 to 16 year olds


Related: Teaching kids about money management



Ways parents can teach their kids about money

  1. Introducing a prepaid debit card
  2. Collecting coins and getting familiar with money
  3. Introducing children to money basics
  4. Introduce the idea of giving back
  5. Let kids take control of their spending
  6. Difference between a want and a need
  7. Incentivise saving
  8. Introduce chores & earning
  9. Use Money games
  10. Set a budget with your child
  11. Explain ads and scams to your child
  12. Encourage them to become entrepreneurs
  13. Help them become a critical consumer
  14. Discuss debt and credit cards
  15. Teach children about investing
  16. Introduce your kids to the top influencers online


There are many ways to teach kids about money and start meaningful conversations about money, budgeting, and saving. Read on to see the full list.

5 to 7-year-olds

Introduce a prepaid debit card

You can open a GoHenry account for your child from the age of 6 to give them somewhere to put their money. You can then set up regular pocket money payments to their GoHenry prepaid kids debit card, so they have their own money that they can spend or save. This provides parents with a great opportunity to discuss where children think money comes from and how it's earned. You might want to set up tasks on the GoHenry app for them to complete and introduce them to the experience of earning money. Be sure to also set them up with a savings goal, so they will automatically save some of their pocket money each week.


Related: Best money apps for kids


Collect coins and get familiar with money

We might be living in an increasingly cashless society, but children still need to get the experience of handling cash. Give your child a piggy bank or even just a clean jar, and they can start collecting coins to put in it. It's a great way to ensure they can recognise and count coins, while also introducing them to saving. Encourage them to fill the jar to the very top with coins, and they'll enjoy watching their savings grow before their eyes. Once they've filled the jar, transfer the money to the GoHenry prepaid debit card, where they can add it to their savings goal.


Related: How to teach your kids to count money


Introduce children to money basics

Another important introduction into financial literacy is explaining where money comes from. Teaching kids this not only helps them to understand how to earn money but also  the  bigger picture about the financial world. A good way to bring this information to life is to teach kids about money basics using GoHenry Money Missions. Here they will learn the fundamentals of money management, and can explore how banks work, and how banks can help them reach their money goals.


Giving back

Children often enjoy helping other people, so they will probably like the idea of donating to charity. As well as being a nice thing to do, this also shows them the value of money and how it can help people less fortunate. With GoHenry, children to make a one-off or regular donation to the NSPCC (capped at 20 pence per week), using the new Giving function in the app. Alternatively, you could give your child some coins that they can put in a donation bucket and briefly explain how the charity they're donating to will help people. They could also donate old clothes and toys to a local charity or choose a couple of extra small things at the supermarket to put in a food bank collection.


7 to 11-year-olds


Let them take control of their spending

Giving your children their own money to spend is the best way to start their financial education. Today, most purchases are made by card, so it makes sense for children to begin learning how card payments work. Pay pocket money into their GoHenry account and encourage them to use their GoHenry prepaid debit card to make their purchases. They can then check their GoHenry app to track their spending and see how much money is left.


Related: How much pocket money to give kids


Learning the differences between want and need

Talk with your children about what it means to want something like a new pair of trainers or an ice cream compared to needing food and somewhere to live. You can use this as the foundation of talking about budgeting and helping them understand spending choices: if we choose to buy something, we may have to do without something else. You can also link this with the relationship between working and earning.


Related: Explaining needs vs wants to your child


Incentivise saving

Delayed gratification is something that many children struggle with. Helping them understand saving can show them the many benefits of not getting what they want straight away. Whether they want a new pair of trainers, book or scooter, encourage them to set themselves a savings goal and work out how long it will take them to afford the item they want. They can use their GoHenry app to watch their savings grow.


Parenting expert Tanith Carey, author of  What’s My Teen Thinking agrees,

“It's a really good idea for parents to show kids that saving money feels good and allows you to buy the bigger things they want. Research shows that children who are encouraged to save are far more likely to keep saving as grown-ups and it gets easier with practice. 


Whether with coins, or by looking on their online money app – which come with kids’ payment cards – show them how to separate their cash into two lots: one for spending and one for saving for rainy day emergencies, charity donations, or items they really want. Then praise them for their self-control.”


Introduce Chores

Teaching kids how to do household chores is an important way to teach them about responsibility and the satisfaction that comes from a job well done. Different ages have different abilities so it's important to tailor the chore list accordingly. You may also want to use chores as a way to earn pocket money. While it's entirely down to parental choice, paying children to do chores is an effective way to teach kids about work and earning. Here’s an idea of how much to pay per chore.


Money games

Money games and video games are a fun, engaging way to get kids involved in financial education. It makes it easier to start conversations, triggers questions and helps key financial messages to stick. For younger kids you are better off with these money based activities that will hold their attention, for kids that love board games take a look at our list of money games for kids.


Related: How does Monopoly teach kids about money


11 to 14-year-olds


Set a budget with your child

Older children and teenagers can start learning how to live within their means. Help them set a budget for how they might spend their pocket money while discussing what you expect their pocket money to cover. Make sure they understand that if they overspend on something, they won’t have the money to purchase something else, and you won't be bailing them out.


Ads and scams

Every day, your kids are bombarded with adverts, and with the popularity of influencers, they're more than likely being targeted on social media, whether they realise it or not. It's a good idea to talk to your children about paid promotions and how they work to help them make better-informed decisions about what they spend their money on. You can also use it as an opportunity to chat to them about the risk of scammers, and if something appears to be too good to be true, it probably is.


Encourage them to earn

Children can't get a part-time job in the UK until they're 13, but they can still earn money with your help. You can set up regular pocket money payments in your GoHenry app and housework tasks for them to complete. Paying kids to do tasks helps emphasise the link between work and earning. Once they earn money, they can make their own financial choices in terms of budgeting, spending or saving.


Encourage them to become entrepreneurs

In today’s world, kids have more opportunities to start making their own money. Encourage your child’s entrepreneurial spirit by helping them sell stuff online, start their own blog, build a dog walking business, or run a classic lemonade stand. Practising business skills and teaching kids about money now will benefit them for years to come.

Related: Debit card for teens

14 to 16-years olds


Become a critical consumer

Teenagers are of the age to start giving more thought to what they buy. Help them become a critical consumer by explaining how they can spot a good deal. Encourage them to shop around rather than buy the first thing they see, compare rates and read the small print.


Related: Why things go on sale, Supply & demand for kids, How to explain inflation to kids


Crank up the savings

It is only a few years until your teenager will go to university, want to buy their first car or move out to a place of their own. Alternatively, they may have more immediate goals in mind, such as festival tickets or some new clothes. Whatever they have their eye on, now is the ideal time to get them started with saving for their future. In their GoHenry app, they can set a savings goal and set aside a portion of their earnings, whether from pocket money or a part-time job.


Discuss debt and credit cards

In December 2021, the average amount of unsecured debt per UK adult was £3,745. That’s why it’s important to help your teenager understand what it means to borrow money and the consequences of not repaying it. Talk with them about the different types of credit and if you lend them any money, ensure they pay it back, so they learn the difference between a gift and a loan.



Teaching children about investing and how the world of investment works can help to give kids more options when they become an adult. Not only is it a practical way of encouraging them to save their pocket or earnings but it also shows them how they can earn money from their money with smart savings over time.


Following finfluencers

Take advantage of older kids’ love of Tiktok and YouTube by introducing them to the top finfluencers. These teenage financial influencers can be a great way to help teach kids about money as they pass on important financial lessons in an age appropriate and fun way.

How can GoHenry help?

A GoHenry account can accelerate a child’s financial education in several ways. Firstly, a GoHenry prepaid kids debit card can help them to establish a connection between work and money by letting them decide what to spend their money on and what to save.  In addition, the in-app Money Missions, helps kids gain skills in investing, saving, budgeting and more through bitesized videos and quizzes.



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Written by Anita Naik Published Nov 10, 2023 ● 6 min read