Science of Parenting: Ways to teach kids about money

Here are ways to teach your kids about money, how to earn it, how to save it and how to spend it… wisely! 

Your child may be forgiven for thinking that money comes from a machine in the wall or from a plastic card, but they are never too young to learn that you have to work to earn money. Giving your child an allowance can be a great way to start the money conversation. Some parents choose to tie pocket money to chores to help emphasise the point that you must earn your money. 

As your child grows, it can be good for them to realise that bills come and have to be paid. You don’t want to overwhelm or worry them but it is good for them to realise that things like electricity, gas, food and other items have to be budgeted for each month. 

One of the greatest lessons you can teach your child is how to budget. This can be done simply by showing them how to decide on a set amount for shopping one week and getting them to help you stick to that amount. Talk to them about how you plan your money, what needs to be paid each month and how you need to put money away for unforeseen bills or nice things like holidays. 

Another great life lesson is how to save. If your child gets an allowance you should encourage them to have a saving portion and a spending portion. Even if you can afford it, if your child wants something nice that costs more than their allowance, you should resist buying it for them and instead encourage them to save by working out how much of their allowance they need to save each week in order to afford the item.