Tips for teaching your children about money

Talking to your children or grandchildren about money from an early age can help create a lifetime of healthy financial habits. Yet only 47% of UK children say they’ve been taught about money either at home or in school¹.

Additionally, children today are growing up in a world shaped by smartphones, online platforms and electronic payments. Compared to previous generations, they’re far more exposed to digital transactions – from tapping contactless cards to making in-app purchases – which can influence how they understand and manage money.

With the use of cash declining, money is becoming less visible in everyday life. Many children rarely handle physical coins or notes, which can make it harder to grasp the value of money or the effort it takes to earn it. This shift highlights the importance of teaching not just traditional financial habits like saving and budgeting, but also helping children navigate modern spending environments.

Here are some tips for teaching children about money and how to avoid some common mistakes.

DO: Give them their own money early on (if you can afford to)

If they’re lucky, children might receive gifts in the form of money from family and friends on birthdays and other celebrations. Counting and sorting coins can help make money a definitive concept, connecting it to the world around them. Try keeping cash to hand when you’re out with your little ones – letting them hand over coins when paying for an item can teach them about exchanging money for goods.

If you’re using contactless payments, explain what’s happening when you tap your bank card or your phone. This can help them understand that money isn’t just a number on a screen.

DO: Encourage them to save a little and often

When children receive money – whether for birthdays, chores or lost teeth – talk to them about their options. Can they spend it now, or save for something bigger? Suggest a mix of both, which is a good introduction to budgeting.

To help them visualise their choices, think about a pair of ‘spend and save’ jars instead of the classic piggy bank: one to dip into whenever they’d like and one for putting money away for something special such as a new toy or a family day out.

For older children, digital saving apps and child-friendly bank accounts can be an engaging and interactive way to help them track their spending and saving. Many of these apps and accounts offer parental controls that allow you to set limits of how much money is spent and where it can be used. This ensures peace of mind whilst giving children a sense of independence.

DO: Let them see how you budget the family’s finances

Money doesn’t have to be a taboo topic. The more you talk about it – in simple, age-appropriate ways – the more confident your child will become.

Consider involving them in everyday decisions, like choosing between eating out or saving for a family holiday. Or keep it simple and take them to the supermarket and explain how choosing some lower-cost products can help money go further. These small moments can spark curiosity and build understanding.

If you use budgeting apps or tools, and your child is slightly older, consider showing them how they work. This can be a great way to introduce digital financial literacy and help them understand how money is tracked and managed in real life.

DO: Help them think critically about digital spending decisions

Online and in-app purchases can create a sense of instant reward, making it harder for children to pause and consider whether something is truly worth buying. Talk to them about the difference between needs and wants, and encourage them to think before they ‘tap’.

DON’T: Pressure them to save it all

Especially if it’s money they’ve earned themselves by doing chores. Allowing them to spend a bit here and there makes the whole experience of money more rewarding for them. And having control over what to buy is an important and exciting part of the learning process too.

DON’T: Discuss money when you’re stressed

It’s important to avoid letting them witness arguments about money. This can make the topic more scary or overwhelming, and could discourage them from discussing it with you later on. Try to keep complicated conversations about money as adult-only conversations.

DON’T: Underestimate your children or delay talking about money

Children are perceptive – they’ll soon begin to realise the important role money plays in family life. Starting early, even with simple concepts such as saving and budgeting, can help them feel more comfortable asking questions and forming their own understanding.

If your child is old enough, it’s important not to delay conversations about the online risks related to money. Children may not realise that linking a parent’s credit card to a gaming account can lead to large bills through in-app purchases. They should also be made aware of scams and fraud. The UK’s MoneyHelper website offers practical advice for parents on how to talk to children about staying safe online.

DON’T: Rely on schools to teach financial literacy

Whilst schools teach maths, they often don’t delve into budgeting, saving or investing. That’s why home conversations are so important. You don’t need to be a financial expert – just be open, honest and willing to share what you know.

Savings products for children

Junior ISAs are a flexible, simple and tax-efficient way for you to save for a child’s future. Parents and legal guardians can open a Junior ISA on behalf of a child, and anyone – including the child – can contribute to it. The money saved is locked away until the child turns 18, at which point they inherit full access. If you’d like to learn more, visit our Junior ISA page.

ISA tax rules may change in the future. ISA tax advantages depend on your individual circumstances.