One of the things I really want my children to understand before they become adults is how to manage money well.
Not because I want them obsessing over money, but because understanding it gives them more choices later in life.
I didn’t start paying into a pension until I was 35. I didn’t properly understand investing or the effect of inflation until I was in my 40s. Looking back, I really wish I’d learnt some of those lessons earlier.
With my own children, we’ve therefore tried to make money something we talk about naturally.
For younger children, that doesn’t need to mean learning about pensions, ISAs or stock markets. It starts much more simply: having some money, making choices with it, sometimes getting those choices wrong, and gradually understanding that money doesn’t have to be spent just because it’s there.
Here are some of the money habits I think are worth learning while the amounts involved are still small.
1. Let them make real choices with real money
Give your child a small amount of money to manage.
It might be £5 pocket money, £10 birthday money or a small budget for a family day out.
They could spend most of it today. They could spend a little and keep the rest. Or they could decide not to spend any of it.
None of those choices is automatically right or wrong.
The valuable part is that the choice belongs to them.
This is difficult to learn from a worksheet because the consequence needs to be real.
If they spend all their money on Monday and discover something else they want on Wednesday, try not to automatically replace it.
Running out is part of learning to manage money.
A £5 mistake at nine years old is a much cheaper lesson than making the same mistake later when the amounts have another couple of zeros attached.
Try it
Next time you would normally buy your child a treat, you could give them the money instead.
For example:
Rather than telling them what they should do, ask:
Then let them decide.
2. Help them discover that money doesn’t have to be spent
One of the biggest habits I want my own children to carry into adulthood is incredibly simple:
Having money doesn’t mean you have to spend it.
One way to help children think about this is to talk about what they want their money to do.
That last idea can be particularly useful.
If your child is saving £30 for a game, that money has a destination.
Money kept for the future gives them something different: options.
Maybe next month they’re invited somewhere. Maybe they discover a new hobby. Maybe something they own breaks.
They don’t have to know exactly what future money will eventually be used for.
Make it practical
If your child likes the idea, make some money pots together.
Old jars, tins, envelopes or small boxes work perfectly. They might choose Spend, Save and Future, or invent their own names.
Decorating the pots gives younger children a creative activity, while deciding how to divide money introduces plenty of natural number work.
If they receive £12, how would they divide it?
Would they make the same choice with £50?
There isn’t a correct percentage. The useful habit is pausing to decide before everything automatically becomes spending money.
3. Saving works better when the goal actually matters to them
“Save your money” isn’t particularly inspiring when you’re eight.
Saving becomes much more interesting when there is something at the other end that the child actually wants.
Ask your child to choose something they genuinely want and find out what it costs.
If it costs £40 and they already have £10, they can work out:
- how much more they need
- how long it might take
- whether they could find it cheaper
- whether second-hand is an option
- whether spending £5 today would make the goal take longer
Saving becomes less about not spending and more about choosing something smaller now or something they want more later.
Make the progress visible
Draw a savings tracker together.
If the target is £40, draw a bar divided into eight £5 sections. Each time another £5 is saved, colour one in.
If they’ve saved £20 of their £40 target, they’re halfway there.
- £20 out of £40
- ½
- 50%
Three different ways of describing exactly the same progress.
The tracker has quietly become a bar graph, a scale and an introduction to fractions and percentages, but it still exists for a real reason: they want to know how close they are to getting something they care about.
4. Teach them to notice when someone is trying to make them want something
Children are surrounded by things designed to persuade them to buy.
A supermarket is a brilliant place to start noticing it.
Look for:
- colourful cereal boxes
- cartoon characters on packaging
- sweets beside the till
- “NEW” labels
- special offers
- products displayed at the end of aisles
- things positioned right at eye level
Then ask:
You can turn an ordinary shopping trip into a persuasion hunt.
Find a real advert
Ask your child to find an advert. It could be on television, YouTube, a poster, a website, inside a game or even on product packaging.
Pause and investigate it together.
- What is it selling?
- Who is it aimed at?
- What colours does it use?
- Are there characters, music or happy people?
- Does it use words such as NEW or LIMITED?
Most importantly:
And then:
5. Create a gap between wanting and buying
Seeing something we want can create a surprisingly strong feeling of urgency.
Children get that feeling. Adults do too.
A useful habit is simply learning to wait.
For a small purchase, try waiting until the next day. For something more expensive, perhaps wait 48 hours or longer.
Then ask:
Sometimes the answer will be yes. That’s fine.
The purpose isn’t to stop children spending. It’s to create a gap between:
I WANT IT!
and
I’m going to buy it.
Another useful question is:
Imagine the item in one hand and the cash in the other. Which would they choose?
That can make the trade-off much easier to see.
6. Show them that cheap and good value aren’t the same thing
Children can easily understand that one item costs £5 and another costs £10.
Understanding value is more interesting.
Imagine one football costs £6 but breaks quickly. Another costs £18 but lasts for years.
The £6 football is cheaper. That doesn’t necessarily make it better value.
Or imagine a £30 game that gets played 60 times. That’s roughly 50p per play.
Compare it with a £10 toy played with twice. That’s £5 per play.
Suddenly the more expensive item may have provided far more value.
Let them investigate something real
Next time you’re buying something the family genuinely needs, let your child compare a few options.
Don’t simply ask:
Ask:
- Which might last longest?
- Will we use all of it?
- Are we paying extra for a brand?
- Is the bigger pack really better value?
- Could we buy it second-hand?
- Do we already have something that does the same job?
That’s maths, research and critical thinking attached to a real decision.
7. Let them earn some money too
Money often feels different when you’ve worked for it.
That doesn’t mean paying children for every normal family responsibility.
Putting their own plate away or tidying their bedroom might simply be part of family life.
But there may be extra jobs they could earn from.
Perhaps they could:
- wash the family car
- help sort the garage
- do an extra gardening job
- organise items to sell
- help with a family project
- make something people might genuinely want to buy
This introduces another useful idea:
Money usually comes from providing something of value.
Someone gives their time, effort, skill, knowledge, product or service.
Ask a different question
Instead of:
try:
Perhaps Dad hates washing the car. Perhaps Grandma wants help sorting books. Perhaps someone needs plants watered while they’re away.
That begins to teach something much more useful than simply making a list of paid chores.
It starts children thinking about value.
8. Talk about needs, wants and priorities
Needs and wants aren’t always as simple as worksheets make them look.
A child may need trainers. They probably don’t need a particular £70 pair.
But that doesn’t automatically mean buying the expensive pair is wrong either.
Maybe they’ll wear them every day. Maybe they’ll last much longer. Maybe they simply love them enough that they’re happy to spend their own money on them.
The more useful idea is often priority.
If you have £30 and want three things costing £20 each, which matters most?
Choosing one means delaying or giving up another. That’s real money management.
Wanting things isn’t bad.
Money isn’t only there for essentials.
Games, hobbies, books, days out and treats can all be perfectly reasonable things to spend money on.
The useful habit is being able to say:
Make money part of ordinary life
You don’t need to sit your child down for a weekly “financial education lesson”. Money is already everywhere.
Let them:
- compare supermarket prices
- count change
- choose between purchases
- save towards something
- research something they want
- manage a small budget
- make a poor purchase occasionally
- earn some money
- notice advertising
- decide something isn’t worth buying after all
Then talk about what happened.
A savings tracker becomes graphs and percentages. Shopping introduces mental arithmetic and comparison. Making something to sell brings in costing and multiplication. Advertising leads naturally into media literacy and persuasive language. Earning introduces work, skills and even the beginnings of business.
None of that needs to be labelled as a lesson for the learning to be happening.
One simple place to start
If money hasn’t been something you’ve talked about much before, don’t create an elaborate system.
Give your child a small amount of real money and ask:
Don’t correct their answer. Ask why.
Would they spend all of it? Save some? Is there something bigger they’d rather have?
Would their answer change if the amount were much larger?
You’ll probably learn quite a lot about how your child already thinks about money.
And that’s a very good place to begin.
Interested in Money Habits?
I’m currently developing Money Habits, a practical online money course for children aged approximately 7–11.
Each short lesson will introduce one useful money idea, then send children into real life to actually use it: comparing supermarket products, spotting advertising, working towards a savings goal, earning some money and making their own spending decisions.
If you’d like to know when it’s ready, pop your email in below.
I’ll also be looking for a small group of families to try it first and give me feedback.
