How do kids learn the value of money?

Teaching kids about the value of money is an important part of their financial development.

A recent study by Shepherds Friendly shows how parents in the UK are helping their children understand finances.

Encouraging savings for the future 

Just under half (46%) of parents encourage their children to save money for the future.

Most common ways parents teach money skills

• helping them distinguish between wants and needs - 62%
• teaching them about what money is used for - 55%
• giving them chores to earn pocket money - 54%
• explaining how money is earned - 53%
• comparing prices of items like clothes and toys to help them make good financial decisions - 44%
• teaching about household costs including bills and food shopping - 41%
• having a savings jar - 31%
• showing how money is spent as an adult - 30%
• teaching about physical cash - 27%
• teaching about different types of payment methods such as credit cards and mobile payments - 27%

Why should kids start learning about money?

Almost a third (31%) of parents agree that children should start learning about the value of money at the age of five or earlier.

What if you can’t afford to give your kids pocket money?

If finding extra cash for pocket money is tough with household bills and living essentials, don’t worry, it’s okay and you shouldn’t feel guilty.

There are other ways to help your child learn about money without needing to give them cash regularly.

Here’s some ideas:

• Homemade tokens: create tokens that your child can save up to use for a special activity, like a family picnic in the park.
• Chores for rewards: instead of giving pocket money regularly, pay your child for completed chores, like £1 per task.

Common ways to earn pocket money

If you do want to provide pocket money, here’s some typical chores kids can do to earn it:

• washing the car
• putting the bins out
• doing some gardening
• washing up
• helping make the dinner

We back calls for better financial education

Financial education shouldn’t start and finish at home. At Money Wellness, we strongly believe that better financial education in schools is crucial.

Unfortunately, millions of young adults are still leaving school without the necessary skills to manage their money effectively – despite financial education being part of the curriculum for over a decade.

New research from Santander UK shows that only 26% of 18-21-year-olds feel they were taught how to handle money at school. This means around 4 million young people are entering adulthood without basic money management skills.

We fully support calls for stronger financial education in schools to bridge the gap for vulnerable children and ensure all kids gain the financial knowledge they need. The earlier young people are taught healthy money habits, the better equipped they’ll be to manage their finances in the future.

Struggling with debt?

If you need support with your finances, we’re here to help. You can find our free and impartial debt advice online any time that suits you.

If you’d rather speak with someone, call us at 0161 518 8285. We're available from 8am to 8pm on weekdays and 10am to 4pm on weekends.