Managing your money well is a life skill that is learned at a very early age. You may be surprised to learn that many children have developed the money habits they will have for the rest of their lives by the age of seven. These are things like whether money burns a hole in their pocket, whether they ignore bills or whether they are able to save money regularly.
Helping children to understand what money is and the choices that need to be made with it from an early age will go a long way towards helping them handle money as an adult. It will also help support you in delivering your child development outcomes in mathematics.
Usually children begin to make comparisons between quantities at around the age of two and show interest in number problems and representing numbers around their third birthday. Learning money skills not only helps them manage their money in later life, but also helps cement numeracy skills.
You can start as young as three years old. At this age it's really important to help children understand that money isn't a toy. Money is different to other objects and therefore we do different things with it - it has value. For this younger age group language development is also important so don't forget to let them know what coins, notes, saving and spending mean.
If you are working with slightly older children who understand this, you can help them appreciate that when money is gone, it's gone. Teach them how money works day-to-day and some of the choices that their family has to make with their money. This is also a good opportunity to help them practice managing some of their own.
Children love learning about money - it gives them the opportunity to play at being grown-ups in a safe way. It also gives you the opportunity to integrate mathematic skills in practical, fun activities. Here are some ideas of activities you could do together.
You will also find some videos at the bottom of this article showing you activities in action with some commentary from child psychologist Dr Elizabeth Kilbey. These also help show how you can play a role with the children and how they handle and view money from a young age.
Money activities for children
Counting your pennies
- Put lots of 1p coins and one each of a 2p, 5p, 10p, 20p on a flat surface
- Build a pile of 1p coins next to each of the higher value coins, to show the difference in their value
- Take down the piles and ask the children to recreate them
Money is all around us
- Talk to the children about their favourite TV characters. How do they handle money?
- How much of what the characters do costs money, even if they're not shown handing it over?
- Which of them are good role models in their attitude towards money and which aren't?
- Ask the children to talk about their 'must have' items. Is there a toy or game they particularly enjoy?
- Ask them why they wanted it and how often they've used it
- This teaches them that wanting what friends have is different from wanting something because they really like it
What does £1 buy?
- Ask the children's parents or carer to give their children £1 to spend on whatever they choose in the supermarket
- Ask the children to show you what they spent their £1 on. Did they find it hard to find something to buy for £1? Was there anything they were hoping to buy, but couldn't afford when they saw the price?
How to get parents involved
Parents are the most influential factor in developing a child's future money skills.
However whilst many know it's important to talk to their children about money, our research shows that over four in ten parents say they find it too difficult. Some think their children are too young, some don't think it's their place and some just don't know what to say.
You can play a really important role in convincing parents to start that conversation. Let them know how much their children enjoyed the activities they took part in, and explain why it is important.
You could plan a joint activity on money such as asking parents or carers to give their child money for lunch or for items such as books or toys, with a pre-determined spending limit.
The child should be given a few choices to pick from, such as different lunch items, or different books, and be challenged to make their choices within the set spending limit. You can then discuss this with the child. What choices did they make? Did they have to leave anything out to stay in budget?
For more tips and ideas, visit the Money Advice Service guide on children and money.
If there are money activities you do with the children you care for that work well, let us know in the comments below.
This article is provided by the Money Advice Service.
All information accurate as of date of publication.