As a parent or grandparent, you want the young children in your life to grow up to be happy and successful adults. A solid grasp of finances could set them off on the right track when they get older, but alarmingly, many children don’t receive any lessons on the subject during their formal education.
A Nationwide survey found that 84% of parents say their children haven’t received any financial education at school despite 96% believing it’s important for young people to learn about money.
In light of data such as this, it might be prudent to take on some of the responsibility and start educating your children or grandchildren about personal finances yourself.
Making the experience as enjoyable as possible could help to engage kids in money conversations. So, read on for three fun ways to pass on essential finance lessons to children as they grow up.
1. Use games to teach kids about money in an interactive way
According to a report from UNICEF, play is one of the most important ways in which young children gain essential knowledge and skills. So, integrating financial lessons into playtime through games could be an effective way to teach them about money.
Games let kids role-play everyday financial scenarios and learn money fundamentals without any risk.
There are several fun games you can play with young children using items you have at home:
- The desert island game – get your children or grandchildren to imagine they’re stranded on a desert island and can only bring six items. Through discussing their options, they’ll soon realise it’s sensible to prioritise essentials over fun items when they have limited choice, giving them an introduction to the basics of budgeting.
- Setting up shop – encourage your child to set up a shop selling household objects. Can they set accurate prices and give correct change? Next, flip the game and let them be the customer. Can they buy everything they need without going over budget?
Alternatively, there’s a plethora of fun financial board games you can buy for kids of all ages:
- Money Bags – in this game for ages five and above, players learn to recognise coins and develop their maths skills by completing chores and earning money as they move around the board.
- Pay Day – suitable for children aged eight and older, Pay Day simulates something most people are familiar with – the monthly payday cycle. Players must ensure their pay packet lasts the month and whoever has the most at the end of day 31 wins.
- The Game of Life – this classic board game takes players through an entire lifetime. It can teach children the financial implications of saving, further education, retiring and more, all in a family-friendly package.
The best money games reward kids for making decisions that would also benefit them in the real world, teaching them valuable lessons in a fun, interactive way. Playing these games is also a lovely chance for quality time together, so it’s a win-win all around.
2. Let them be in charge of money on a day out
As your children or grandchildren grow up, it’s important that they begin to understand the value of money.
While you will no doubt enjoy treating your loved ones, it can be hard for children to grasp how far money goes when adults buy things for them. Finding interesting ways for youngsters to practise spending money helps them understand exactly how much items and activities cost.
One fun way to do this is to let them be in charge of the family budget on a day out.
For example, say you’re visiting a castle. Before you arrive, give them £100 and explain that this money must pay for everything you do that day.
When you arrive, they’ll have to pay for entry. This might leave them with, say, £50.
After exploring the castle, your child might be tempted to buy something from the gift shop. However, if they buy a toy or book, they might not have enough money to pay for lunch.
They’ll need to carefully consider what’s more important. Hopefully, they’ll realise that food takes priority over souvenirs. If not, they’ll have to face the consequences of their actions and skip lunch.
Perhaps it would be wise to have backup sandwiches in the car to avoid any tantrums on the way home!
3. Books are a fun way to learn for kids of all ages
If your grandchild loves story time, or your bleary-eyed teenager stays up reading until the early hours, you could introduce them to books about money.
You might think personal finance is too dry a topic for children’s literature, but there’s an excellent range of entertaining books on the subject for children of all ages.
The Four Money Bears by Mac Gardner is a wonderful option for younger children.
Through beautiful illustrations and accessible storytelling, Gardner uses the tale of Spender Bear, Saver Bear, Investor Bear, and Giver Bear to teach kids about the functions of money and instil lessons such as spending cautiously, saving diligently, investing wisely, and giving generously.
For kids aged 8 to 12, Finance 101 for Kids: Money Lessons Children Cannot Afford to Miss by Walter Andal is a fun-to-read crash course on essential topics like earning, saving, investing, and credit. It even touches on more advanced subjects like the stock market, foreign exchanges, and basic economics.
Reality TV-loving teenagers might enjoy Deborah Meaden Talks Money. This insightful book from entrepreneur and TV personality Deborah Meaden features podcast-style interviews with stars including Gary Neville, Sophie Ellis-Bextor, and Joe Lycett. It’s designed to demystify the world of finance and help your children build good money habits in an exciting, relatable way.
Teaching your children and grandchildren about money may seem like a challenge now, but when they reach adulthood, all your patience and effort should pay off. You never know, you may even get a belated thank you!
Contact us to support your children in other ways
Sharing financial knowledge with children is important, but there are other ways you can support their financial future.
We can help you craft a financial plan that supports your children or grandchildren, laying the foundations for the next generation. Contact us to arrange a meeting.
Please note: This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.
