Top 10 Tips to Help Your Child Improve Their Money Skills

    Many children may find themselves receiving money as Christmas gifts this year, providing a great opportunity for parents to start teaching their children about the value of building a healthy relationship with money. 


    The financial experts from have compiled a list of their top tips for teaching your children about money this Christmas. Salman Haqqi, personal finance expert from, speaks about why teaching children how to handle money from a young age is so beneficial. “Creating an environment in which you are able to speak more openly with your children about your financial decisions is vital for engaging them from a young age on the value of money, ” says Salman.

    “Showing them how to make choices when shopping for Christmas presents and what they can do to save the money they may receive as gifts, will set up good managing habits.

    “It’s important to make sure your lessons are age-appropriate and that you continue to involve and teach your children about money as they grow. A healthy relationship with finances starts at a young age, and children learn most of their habits from their parents.”

    10 Tips to Help Your Child Improve Their Money Skills

    Speak Openly About Small Financial Decisions 

    Start involving your child with minor financial decisions, such as deciding which brands and items to buy when shopping and opting for products that will last a long time. This way your child will be able to understand the decisions you make while also feeling in control of certain financial choices they make.

    Older children could also help with budgeting while shopping this Christmas if you ask them to keep a running total of the items you buy. Not only will this help their maths skills, but it can also help them to understand how small items can still add up in price, demonstrating that not everything is affordable on a budget.

    Set a Good Example With Your Own Finances

    There’s no two ways about it, children learn money habits from their parents. Showing them small activities such as checking the receipt after your shop or putting money into savings can start developing positive habits from a young age.

    Encourage your child to ask questions without repercussion in this setting. While you might not necessarily have all the answers, opening up a dialogue is a healthy way for your child to learn more about finance.

    Use Pocket Money to Teach Children How to Save

    Alongside teaching children the relationship between work and money, any pocket money earned through household chores or Christmas gifts can present a great opportunity to show children how to save.

    If your child has shown interest in a more expensive purchase, you could set them up with an old fashioned piggy bank where they can ‘deposit’ their earnings, or give them a chart to fill out so they can track how much money they receive or spend periodically (e.g. weekly, monthly etc.). 

    Reward Them by Learning About Interest

    Paying small amounts of interest on the money your child has saved is a helpful way to encourage them to keep saving. Older children will be delighted to learn that the interest they earned last week can be used to earn more interest if they save until next week.

    Use Trips to the Shop to Learn About Saving vs. Spending

    Another practical way to teach a child about the benefits of saving is by visiting shops. Allow them full control of their own money on the understanding that if they don’t have enough they won’t be able to borrow any more. The more they feel in control of their own finances, the more they will be able to make sensible decisions when it comes to spending or saving.

    Use Digital Tools with Older Children

    There are a whole range of online tools for teaching older children about online banking and using cards for both saving and payments. One of the leading products on the market is GoHenry, which is suitable for those aged six and up. It costs £2.99 a month and allows parents to set strict spending limits, monitor what their kids are buying and where they are spending their money.

    Play ‘Shop’ at Home

    Invest in toys, such as a cash register and pretend money, and stock shelves with everyday ‘groceries’ – cereal boxes, sponges, kitchen roll and biscuits. This develops children’s understanding of the value of money and that goods have to be paid for.

    Reward Good Behaviour

    Reward helping around the house with a small sum of money. Use stickers as ‘currency’ and a chart to keep track of the total. The reinforces the understanding that money has to be worked for.

    Older children may prefer a reward system based on games; for example, doing household chores unlocks tokens which can be swapped for cash. Alternatively, the ‘chores’ could buy additional perks, such as a treat, mobile phone top-up or meal-out voucher.

    Set up a Children’s Savings Account

    This is a great way of showing children how regular saving can generate extra money through interest – up to 4% in top savings accounts – and the minimum payment is typically £5 per month, so it won’t break the bank.

    Encourage Extra Earnings

    Additional income can be sourced from paper rounds, car washing, leaflet drops (from age 13) or working in a cafe or restaurant (from age 14). Working outside the home for an income prompts prudent money management and addresses concerns that two thirds of 16/17 year-olds cannot read a payslip and a third have never put money into a bank account.

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