The early experiences children have with money can shape their financial behaviour as adults, according to a study published by the UK government’s MoneyHelper service. By the age of seven, the University of Cambridge study found, most children are capable of grasping the value of money, delaying gratification and understanding that some choices are irreversible or will cause them problems in the future. The research suggests children who are allowed to make age-appropriate financial decisions and experience spending or saving dilemmas can form positive “habits of the mind” when it comes to money. This could lead to a lifelong improvement in their ability to plan ahead and be reflective in their thinking about money, or they may learn how to regulate their impulses and emotions in a way that promotes positive financial behaviour later in life.
Juliette Collier, a national director of the charity Campaign for Learning, says it is worth giving children as young as three or four their own coins to handle, spend and save. “Once they are old enough not to put it in their mouth, then give them some money,” she says. “If, for example, they end up wanting to spend that money on sweeties, then make it clear they can’t spend the money on something else. Let them make choices, and experience the consequences.”
Make it fun
There are lots of free resources you can use to teach young children about money at home. Valuesmoneyandme.co.uk, a website created by the credit reference agency Experian, offers free online books and interactive quizzes aimed at primary school aged children that explore interesting ethical questions about money and real world financial dilemmas. FunKidsLive.com hosts a short money podcast aimed at children, and there are lots of free games online (see topmarks.co.uk/maths-games/5-7-years/money or natwest.mymoneysense.com). If you prefer board games, Money Match Cafe or Pop to the Shops by Orchard Toys are educational and imaginative, while Cheeky Monkeys subtly provides useful financial lessons about the consequences of avarice and risk-taking.
Finally, do not underestimate the value of playing games such as “going to the shops” at home with real coins. Be sure to set a budget.
Teaching your child about money early on can help them in later life. Photograph: Cultura Creative (RF)/Alamy
Discuss the purpose of money
Collier suggests taking photos of different items in your home that can then be classified into necessities and luxuries, triggering a …….