By Hanna Evans

Learning about money is an important part of growing up, and parents and caregivers are likely to have the most meaningful impact when teaching these lessons. However, knowing when to get started, and how to start the conversation, can be tricky. To help, we’ve put together a few useful tips, so you can equip your kids with the skills and knowledge they need for a healthy financial future.

Use Age-appropriate Language There are lots of topics to cover with your child, but translating them into child-friendly language can be a challenge. How you talk about them will depend on their age and ability — you may want to think about starting off with more simple topics, and saving some of the more complex ones for when they’re older.

You could start with simple, concrete concepts for 3-5 year olds. For example, “money is something we need to buy things we need and want.” For 6-8 year olds, you may want to introduce choice and planning concepts — for example, “If we spend money on this, we won’t have money for something else.” For 9-11 year olds, consider discussing budgeting and trade-offs, for example, by saying “It’s OK to want things we don’t buy” or “A budget helps us to feel organized.” For older children and teens, it may become easier to talk about more complex concepts, and to start introducing values and priorities, including how to handle disappointment and social pressures. For example, “We don’t spend money on everything we could, because we are working towards goals” or “We don’t have to have new things to fit in.” 

Older children and teens may be more likely to turn to the internet for financial advice, if they have access to it — so make sure you’re sharing resources and websites with useful money tips to guide them in the right direction.

Incorporate Hands-on Activities It can be difficult to keep a child’s attention through conversation, particularly younger children. Incorporating hands-on, fun activities may help your child to grasp certain concepts that they otherwise wouldn’t be able to through words alone. For example, you could “play shops,” allowing your child to pick out items and then pay you for them, with fake or real money, and then receive change back. Interactive activities like this equip your child with real-world examples, boosting their learning and confidence.

Similarly, simply putting pocket money away can help your child to learn the importance of saving money, and to see how their money can grow. Remitly suggests attaching pocket money to tasks, so that your child can learn that money is earnt. This will help to foster a sense of responsibility and ownership, boosting your child’s understanding of the value of money.

No matter which hands-on activity you choose to incorporate, remember to talk them through it too — they should be used as a way to complement the lessons they’re learning, rather than to replace important conversations.

Model Responsible Money Management Remember, kids learn by modelling their caregiver’s behavior. No matter how young your child is, they’re likely to be picking up on the way you talk about money, so it’s best to be mindful of this. For example, if you feel stressed about a financial situation, you might want to think about how you can frame it in a way that feels more like a problem to be solved — anytime you express helplessness, you may pass this feeling onto your child.

Of course, there’s no need to be perfect, and you don’t need to get it right the first time. The point is to simply be aware of your own actions and think about how they may impact your child’s approach to money management.

Consider these phrases to avoid and their alternatives:

• “Money needs planning and care” instead of “Money doesn’t grow on trees;”

• “We’re being careful with money” instead of “We don’t have money;”

• “That’s not how we’re using our money today” instead of “We can’t afford it.”

Financial Lessons to Support Your Child’s Future No matter how you start the conversation with your kids, know that you’re teaching them an important lesson that will serve them well in their adult lives. There is no one-size-fits-all, and you know your child best — so make sure to tailor the language used and the topics of conversation to suit your child’s needs. 

Your child’s financial education should be ongoing, and they’ll pick up new knowledge throughout their childhood. Start off small, and remember there’s plenty of time to teach the more complicated concepts later. 

A mom of two, Hanna Evans aims to give more parents the tools they need to talk to their children about money in an age-appropriate way.