How to help your kids to have a good relationship with money

Our friends at Legal & General share their tips

29 July 2021

Learning how to handle money is one of the most important skills we learn!

We carry through a lot of the habits we learn as children into our adult lives. Teaching children about money from an early age helps them manage their finances as they get older and develop good habits. But where do you start? Our friends at Legal & General, sponsors of the Saver badge for Guides, helped us come up with some top tips for how you can help children of all ages.

1) Talk about it

Talking about money openly in your family is one of the most helpful things you can do! It shows that it’s ok to talk about money, and that it’s not a topic that’s ‘just for grown-ups’. For younger children, this can be as simple as talking out loud about different food options in the supermarket. You could point out how different brands are different prices, even though the food is the same. You can talk about your favourites, and why you spend more on some things than others.  

Older children and teens can also get involved with bigger money conversations. If you’re saving up for Christmas presents, or a holiday, don’t feel like you have to hide that from the kids! Hearing that you’re budgeting for big items doesn’t need to cause anxiety if you talk about it positively. It’s a great example to set for any children in your life, and helps them to value fun treats and experiences.

2) Give pocket money regularly

We couldn’t leave this one out! When it comes to pocket money, it doesn’t matter how much you decide to give. What’s important is keeping the rules consistent. Make sure that your child knows how much they’ll get and how often, and make sure you have frequent conversations about what pocket money can be spent on.

Although cash is becoming less common, using real coins is still a great learning tool for younger children. Seeing how their coins stack up in a piggy bank, and seeing how their spending changes the total, is the first step towards understanding how money works. For older children, there are lots of options to help them manage their own bank accounts. Lots of banks offer children’s bank accounts which will allow you to set spending limits and transfer regular payments.

3) Save, save, save!

While you’re covering the basics, remember to focus on good money habits you’d like to encourage. We all know how important it is to save money, but all of us have struggled with impulse control at some point! For children, it’s even harder to resist the temptation to spend right away. There are lots of ways to help. For younger children using piggy banks, consider setting up a second pot. Explain that every time they get pocket money, a small amount of it will always go into the ‘savings’ pot. They can then choose whether to spend or save the rest.

Seeing how small amounts of money add up will help them understand the benefits of saving, and they may well choose to save more than they spend! For children who find it difficult or frustrating, you can set a date in the future where they’re allowed to open the second pot, and get a treat with all their savings.

For older children and teenagers, it’s great to let them have a little more control, but you can still encourage good habits. Encourage them to write a budget down so that they can track their spending and saving, and take a look at it with them every week or month. You can chat through any savings goals they have, and ask them why they want to spend on certain things. The goal isn’t to tell what them to do! It’s to help them think about their spending, and not to make big decisions on an impulse.

Guides can practice their saving skills with the Saver badge! With this badge, girls can learn how to manage their schedules, set a budget, and save energy. Have you done it yet?

Whatever money rules you decide to set up, the most important things are to keep them consistent, and to let your child know that they can always talk to you. If they ever do overspend, let them know that it’s ok. You’re here to help them understand how it happened and make a plan for the future.