Gillean Dooney, Head of Families at Barclays, gives us her top tips for teaching children financial literacy from a young age.
1. Start pocket money young – research found that most parents start giving their child a little something from seven years old, which is a great age for them to start learning about the value of money and associating it as a reward for completing a task or behaving well.
2. Talk to them about money – having open conversations about how money helps you afford the house you live in, the food you eat and the activities you do as a family will help your child understand how money works in the adult world. This will hopefully stand them in good stead for when they have to manage their own finances.
3. Set up a home tuck shop – to provide additional real-world context, why not set up a tuck shop at home and give them a fixed amount of money to spend on snacks each week? By creating a menu with prices for each snack, such as a 10p apple and a 25p packet of crisps, they’ll need to think about how much they want to spend each day to make their money last.
4. Teach them the difference between wanting something and needing something – help them to understand why sometimes you need to prioritise things you need, such as school shoes, over things that are ‘nice to have’, such as a new computer game. This is a really important lesson so they can start to understand the importance of budgeting and prioritising purchases.
5. Make saving more visual – help them visualise how their money can build up by turning old jars into homemade piggy banks. Or for bigger items, consider opening a children’s savings account, and creating a visual plan with key milestones that they can track and tick off along the way. It’s a fun, quick and easy way to get children excited about watching their savings grow.