Teaching your child about money Jane Kemp Children are curious about money from an early age, and it's worth harnessing this curiosity and helping them understand its value.

The value of money

To explain how money works include your child in simple transactions. Explain the basics of how you spend your money by using a pile of pennies to demonstrate how much money goes on food, bills and other regular expenses.

Talking shop

Talk to your child about how much things cost when you're shopping. The supermarket is the obvious place to do this, as you can point out the prices and compare the cost of different brands.

You can also explain to older children that there are other ways to pay for things without using cash, such as credit and debit cards.

Talk about how much a little piece of card (such as a season travel ticket or cinema ticket) can be worth.

Are we rich?

Children often ask about how rich you are. Explain that some people struggle to get enough money to buy food and clothes, while others don't have to worry.

You may feel it's important to let your child know family money matters are private, and not for discussion outside the home.

The power of pocket money

Having pocket money is good for your child. It gives them a sense of independence and a measure of choice in making decisions about how the money is spent.

What to give

While your child’s at primary school, a fixed amount each week is reasonable. The amount you give becomes more complicated as your child gets older and starts comparing notes with friends about how much they receive.

Talk to other parents to establish the going rate, and then decide what you think is reasonable.

Stick to the rules

Children have a strong sense of what's fair, so don't be seen to give in and buy extras for one child who's already spent all their money when your other child has had to save to buy their treats.

Ages and stages

Increase pocket money by a fixed amount on each birthday. Once your child's old enough to help out with basic household chores, you could arrange top-ups to pocket money in exchange for them doing specific jobs around the house or garden.

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