Ever wonder why so many adults struggle with money? The truth is, many of us never got a proper financial education. We’re left to figure out complex concepts like interest rates and taxes all on our own, often through trial and error. But it doesn't have to be this way. By teaching children about money from a young age, we can equip them with the tools they need to build a secure and successful future.
I believe that teaching children about money from a young age is crucial. It helps them develop lifelong financial literacy and good spending habits. It empowers them to make smart financial decisions as adults, rather than learning through costly mistakes. Working as a Tax Advisor I see many adults that struggle with finances, don't understand interest rates and have little knowledge about the UK tax system maybe that's why I feel so strongly about encouraging my children to have a understanding of finances and teach them simple skills that they can take with them into adulthood.
Why It's Crucial to Teach Kids About Money
Early financial education provides children with the tools that they need to navigate the complexities of personal finance. Without this foundational knowledge, many adults struggle with basic concepts of things like interest rates, credit scores, and taxes. This lack of understanding can lead to significant financial stress, debt, and missed opportunities for wealth building.
By educating children about finances from a young age, we can:
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Build a Strong Foundation of knowledge: Kids learn the value of money and the difference between needs and wants.
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Encourage Smart Habits: They're more likely to become savers rather than impulse spenders.
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Foster Responsibility: Having to manage their own budget teaches children to be responsible with their spending and to be patient when saving for a goal.
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Reduce Financial Anxiety: Being confident about money matters and can decrease stress later in life.
Why is Financial Education Left Out in Schools?
Think of financial literacy as a crucial life skill, much like reading or writing. The earlier kids learn it, the more ingrained these habits become. Starting young helps demystify money and removes the fear and anxiety often associated with it. This early exposure encourages lifelong habits of responsible spending, saving, and investing.
Yet despite the clear benefits, formal financial education is often missing from school curriculums. While subjects like Maths, English and History are foundational, practical life skills like money management are frequently overlooked. I believe that this is a missed opportunity and that simple, small changes could easily be integrated into existing lessons. Why cant a match class use real world examples when teaching children about decimals and percentages? Some simple changes could teach them about interest rates, discounts, budgeting and taxes at the same time. Integrations into many different subjects wouldn't require a whole new subject but could modernise education to provide an invaluable skills and prepare children for life beyond school.
Practical Steps to Get Started
How can you start teaching your child about money today? Here's a few things that I do
1. Open a Bank Account
A great way to get started is by opening a junior bank account for your child. This makes the idea of saving and spending more tangible and provides a more realistic learning experience. Most banks offer accounts with a debit card linked to a parent's account, so you can easily keep an eye on their activity and guide them. We use a Monzo account which is a fantastic option for both kids and parents. Read our blog here.
Opening a bank account gives your child a sense of ownership over their money and introduces them to how banks work. Once the account is set up, you can:
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Encourage saving: Help them decide how much of their allowance or earned money to save versus how much to spend.
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Review transactions: Use the bank's mobile app to look at their spending with them, discussing their purchases.
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Set goals and limits: Work together to set specific savings goals, whether it’s for a new toy, a video game, or something bigger.
2. Connect Earning to Effort
One of the most valuable lessons you can teach is that money is earned, not just given. By assigning chores or other tasks, i believe that you help your child understand the direct link between work and reward. This reinforces the idea that money doesn't simply "grow on trees."
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Set Clear Expectations: Create a list of age-appropriate tasks and the reward for completing them.
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Be Consistent: Follow through with the agreed-upon payment so they learn to trust the system.
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Encourage Initiative: As they get older, you can offer rewards for taking on extra or more challenging tasks.
3. Talk About Money Openly
Many families avoid talking about finances, which can create a sense of mystery or shame around the topic. Normalise these conversations. When you're at the supermarket, explain why you're choosing one brand over another or the benefits of using a discount voucher. When a bill comes in, briefly explain what it's for and why you need to pay it. This transparency demystifies money and makes it a natural part of life.
A Brighter Future, One Lesson at a Time
By starting early, we're not just teaching kids about money, we're teaching them about responsibility, planning, and self-control. They'll grow up with a greater sense of confidence and a solid foundation to navigate the financial complexities of adulthood. This early education is a powerful investment in their future, ensuring they are prepared to handle their finances wisely and build a life of stability and freedom.
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