How To Teach Your Kids About Money At Every Age
When Should I start teaching my kids about money?
If you’re keen to see your children thrive financially as adults, it’s a good idea to think carefully about how you can support them throughout their childhood journey
A lack of financial skills can lead to worry, debt, and insecurity in the future. It’s sobering that in the UK alone (according to a recent survey by Money Advice Service)
- 39% of adults (20.3 million) don’t feel confident in managing their own money.
- 11.5 million have less than £100 in savings.
- nearly nine million adults are in serious debt.
It is also thought that adult money habits are set by the age of 7 years-old (Cambridge University research).
It’s never too late to start teaching kids how to handle money and manage it wisely – but the earlier you can get them off to a good start, the better! Here at QniQr, we love helping parents to work with their children to become money savvy and have fun at the same time! We hope you’ll find our tips inspiring…
Top tips to train your kids to be money smart: from age 2-18
# Toddlers & Pre-schoolers
Children at this age will benefit from understanding that money is an important part of life and needed to pay for everyday essentials. They may be too young to fully appreciate the value of things, but you can get them familiar with money in various ways.
- Play games with real or toy money and help them learn the names of the different coins and notes.
- Play counting games or hide coins and let them find and name them.
- Take them shopping with you and give them some money to hand over and pay for things. This way they can see how exchange takes place and that money isn’t given back!
- Play games at home exchanging money – kids at this age can find it hard to let go of things, but you can help them get used to the idea in role play.
# Children Aged 4-7
This is the perfect time to help your children grasp the important concepts of earning, saving, and opportunity cost.
- Earning – children love responsibility and practicing their independence. You can encourage your child to take ownership and even pride in their ability to earn their own money through chores or other challenges. Check out QniQr’s brilliant ideas for children here. Kids need to appreciate that effort and hard work is involved in the process of receiving money. Don't wait until they are teens!
- Saving - teach your kids that sometimes it’s worth saving their pennies to purchase something they would really love, and the concept of delayed gratification. Get them a piggy bank or money jar and encourage them to stick a picture of the item they’re saving for on their bedroom wall, or even draw a picture of it. Give them lots of high fives and don’t give in to pestering if they get impatient!
- Opportunity Cost – The term itself may be confusing at this age, but it’s a principle your young children need to digest. ‘Wants’ vs ‘Needs’, or ‘impulse buying’ Vs ‘Long-term goals’. Once money is spent, it's gone and this is a principle that needs to sink in. One mum has a great tip you could try…” On our 2 week holiday, I gave each of our children £15 spending money. I explained to them they might see lots of nice things over the course of our time away, and it might be better if they didn't spend it in the first few days...Sure enough, it helped them to weigh up their options and they all made their purchases being sure they were spending it on their most wanted souvenirs!”
# Children aged 8-12
Budgeting is an invaluable skill to empower your kids with, they will thank you in the future even if they don’t right now! Sometimes it takes real willpower as a parent to let children learn the ups and downs of handling their own budget while allowing them to makes mistakes along the way, and deal with the tears!
- Agree with your kids what their money needs to cover on a weekly or monthly basis. If it’s for sweets and pocket money toys, don’t supplement their income with indulgence or by giving in to their pleas if they can’t afford the latest craze unless they save.
- Help them to make a spending plan and encourage them that they can increase it if they do extra chores or manage to earn some money through selling things they no longer need or want. QniQr is a brilliant way for them to do just this!
- Encourage them that budgeting isn’t boring, it is a gateway to financial freedom and independence!
- Include them in family discussions when big decisions are being made – this is a great way to help them see that money isn’t infinite and needs to be spent wisely.
- This is also a good age to get them set up with their own bank account - and you can help them become familiar with reading bank statements and the importance of tracking their spending.
# Teens (13-17)
Independence is the key here! If your older teens have been putting some of the above into practice already, they will be used to managing their own budget, saving, and spending wisely. If not, you can introduce all the previous steps outlined and get them started.
Other key lessons to communicate at this age are...
- Your teen's social life and capacity to spend will most likely increase! Instead of upping their allowance or giving in to demands, you could encourage them to earn it by getting a job. You will be surprised by how entrepreneurial they can be! Giving them the responsibility of covering their own expenses is an invaluable life lesson and will help prepare them for college or university life. You can set an allowance if you want to - but agree with them what they should cover for themselves. We have some great tips on encouraging entrepreneurship in kids here!
- Saving for the future is a powerful principle to encourage at this time. Life may be expensive for them now, but it will get even more expensive in years to come and they won't always have parents to fall back upon. Encourage them to open a savings account and put a little money aside each month. Preparing for unexpected costs and teaching them to 'grow' their money is going to put them in great stead for later life.
- Let them fall! There is no better way to encourage your teens to take responsibility and become money-wise, than letting them learn the hard way. It's tough love, but it is also the best love you can give them. One parent explains..."My son was driving his dad's car and had a minor accident causing some damage to the bumper. It would have been easy to cover the cost ourselves, but we felt he needed to contribute too. He wasn't happy about it but agreed to pay half on a monthly basis which meant he couldn't go out as much with his friends or buy the latest video game. It took him 5 months to pay off the debt. It felt mean at times, but he has actually told us recently that it taught him a lot - and he is good with budgeting and saving now. He is also more careful on the road!"
An exciting new way for kids to earn their own money...
QniQr is the perfect platform for children to learn how to earn and manage their own money. It’s the first online marketplace designed exclusively for children and teens (with full parental controls) where they can sell or trade their stuff, build up their e-wallet, and have fun at the same time.
QniQr comes packed with tutorials for kids to learn everything about buying and selling, from how to use the site, to becoming an entrepreneur!
Research shows that young people develop key life skills and grow in self-confidence when trading with peers and making their own money.
Get them started with their own online shop - here!