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How and When to Teach Your Children about Finance

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It is really important to teach your children about finance. They need to understand all about money, borrowing, saving, investing and spending. Having this knowledge before they leave home will mean that they will be able to manage their money well.

Many people think that preschool is too young to learn very much. However, once a child is old enough to see you paying for things in shops, you can get them to help you. It is good for them to get an understanding of the fact that you have to pay for things and that money has to be earned. They may even enjoy paying or things themselves, if you give them money to buy things that they want.

Infant School
In infant school some children start to get pocket money. At this age, it is not really necessary but they may have older siblings that get it and feel left out if they do not have it. At this age they will be with you shopping in the supermarket and you can start to show them prices on items and how you choose which things to buy. They will start to learn money maths at school and you could back this up by showing them coins and discussing their value.

Junior School
In primary school most children advance in their maths skills. They can start to understand how to compare prices, such as looking at price per 100g to see which of two products is the cheapest. You can also explain to them about value for money and why you might avoid the very cheapest items but buy things that are a bit dearer because they are better quality. You can also talk to them about your household finances and what money you have to pay out as well as how you get money coming in. Let the children make a few unwise purchases, perhaps cheap things that will break quickly or expensive things they do not play with much so that they learn why it is important to think before you spend money.

Secondary School
Secondary school is the time to really start explaining about the importance of saving and not over spending. They can be taught some simple economics so that they understand the relevance of interest rates and how that effects any money that they save and borrow. They will be likely to have their own money to spend and it is important to make sure that they have a limit to how much money they have so that they are limited in their spending and realise that the supply of money is not endless.

Young Adulthood
In young adulthood many children get help from their parents. This could be with buying a car, getting a deposit on a home etc. It could even be help with buying food or clothes. Although it is really nice to be able to help out your children, you need to make sure that they understand that you are not a source of income for them. They need to know that they have to find the money to pay for the things that they want by holding down a job and not buying more than they can afford. Hopefully you will have taught them enough when they were younger so that they know this but you need to make sure that you do not encourage poor financial management by giving them money whenever they ask for it.



Rachel Henderson is a professional freelance writer from the UK. She writes on many subjects but specialises in personal finance. As well as contributing to various blogs and websites she has her own website tracking her own money making process and sells her books through

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