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6 experts and 2 parents have answered

expert answer
Lorraine Allman expert
Lorraine Allman Author, Businesswoman, Mum GB
Careers expert

Helping children develop a basic understanding of money is important from an early age and is a good basis from which to begin to teach them about financial responsibility. It’s also important that the value of money is understood not just in terms of currency values and prices, but also through an appreciation of its role in social relationships.

There are lots of ways to teach your daughter about the value of money and power of savings. For example, use cash! Children are growing up rarely seeing and handling cash, so give your daughter as many opportunities as possible to handle money, whether that’s out shopping or on a family trip.

At some point, if not already, your daughter may want to start helping you out more around the house - perhaps setting the table for tea or other household chores. If you're happy to pay a small amount for particular tasks then that's an ideal opportunity to start teaching her about the relationship between work and money. It is important, however, to also help her understand that not everyone has the same amount of money, so helping out should not always involve financial reward.

Take opportunities as they arise to teach your daughter about prices of everyday and special purchases when you’re out and about. Encourage her to start looking at prices, noticing for example the price differences between ‘branded’ and ‘value’ items.****


****There's no reason why you can't introduce your child to budgeting either! Next time you're planning a family trip, get her involved not just in the practicalities but also in making decisions about how much money will be required by discussing what has to be paid for. For example car parking charges, entrance fees, or activities which have a charge. Discussing and then listing out all the potential expenditures with your child, and agreeing which part of the ‘budget’ they can be responsible for, will not just make the trip more financially manageable for you but helps them learn to recognise costs and understand the basic principles of budgeting, whilst also of course encouraging them to use some basic maths skills.

Whether or not you give your child an allowance or they ‘earn’ their pocket money, the fact is that encouraging them to manage cash and manage it well is an important skill for life. Birthday and Christmas times are popular to receive monetary gifts so present perfect opportunities to discuss what they want to do with the money – save it, spend it, or a combination. Younger children have less understanding of the face value of money above say £10 so if they have more than that, try breaking it down into smaller amounts to help them decide. It’s tempting to hold on to the money for them and just bring it out when they decide they want a new toy, or for a special trip out, but try to resist doing that and remember that trusting them to manage this money will help them understand and take financial responsibility.

For older children, they could select and decorate three clear jars which are then labeled SAVE; SPEND; and SHARE. The Save jar is to save for more expensive items – encourage them to think long-term here. The Spend jar is for smaller items such as weekly pocket money purchases. The Share jar is for charitable giving. Discuss the importance of helping others less fortunate than themselves, and help choose a charity of interest by researching online or locally. Discuss whether they want to divide the money equally among the three jars or to apportion different amounts. This is also a good opportunity for you to share your own ways of saving. You may want to open a savings account or young person’s bank account when you feel they’re ready.


Finally, encourage your child to think about ways in which they may be able to earn and save money to buy a toy or game they want will help them begin to learn that there are differences between wanting something and needing something. Recognising these differences will make a significant impact on understanding more clearly why such decisions are made. It encourages prudence and enables them to differentiate between affordable and worthwhile investments and indiscriminate spending.

Encouraging a degree of independence by allowing your child to make their own decisions with their own money as they grow older helps them learn that managing money responsibly is also about deciding responsibly too, which is a good opportunity to again bring up the issue of needs versus wants.__

5 Reply Share:
Opinion 1 year ago
expert answer
Priya Desai expert
Priya Desai Speech and Language Therapist London, GB
Language expert

I agree with all that Lorraine Allman has said. It's important to place value on money and talk about money: how it's earnt, what things cost, why some things cost more than others. And also, as Lorraine has mentioned, get children involved in simple every day purchasing decisions.

I have recommended the Goldstar Savings Ipad app to many parents; it's an app in which a child can track and monitor their personal savings. For example, if your child wants a new book, you select (or negotiate) a specific chore/activity for your child to do e.g. independently pack a school bag. Your child will then get X amount of money every time the chore/activity is completed; this is then tracked on a colourful, easy to follow time table.

3 Reply ( 1 ) Share:
Experience 1 year ago
expert answer
HerMelness Speaks expert
HerMelness Speaks Parent blogger/student mentor GB
Parenting expert expert

Dare I say the dreaded words...but when I was young(er), it was very usual to wait for birthdays, Christmas or another milestone date before children were given quite big buys. In today's fast gratification world, children are not easily able to associate or assess monetary value.

I try to combat this with my own children in a few ways. For example:

  1. There is no gratuitous gift giving at Christmas. One gift and then any other money is spent on shared experience together - like going to the theatre, for instance.

  2. Big wants and needs before birthdays, etc, are saved for by them where I pitch in x% if it is appropriate.

  3. The children often do our household grocery shop and are given money (and thus a budget) in which to get certain things achieved.

  4. If we make an 'impulse buy' when out, the children are now used to me firing up the budget spreadsheet so that something else has to go to afford the treat.

It's the age old showing rather than telling which will help children as they grow up.

I also help my daughter to save money by taking it and putting it in a separate account for her rather than nag that she isn't saving. The first time we did this she was astounded that she had saved over £350 and it gave her the added impetus to then try and save under her own steam.

2 Reply Share:
Experience 1 year ago
Ben Sullivan
Ben Sullivan Father & Video Game Producer Burnaby, CA

This may seem obvious coming from a game developer, but playing RPGs like Final Fantasy growing up was very important in my learning the value of money. Much like real life, RPGs usually involve a lot of relatively un-fun work ("grinding") to earn money and experience points which the player must then choose strategically what to spend on. Good RPGs offer tons of these spending choices - do you spend your hard-earned money on upgrading your magic staff, or your sword? Which will help you earn more money? Which will make the game more fun?

It seems a bit silly, but I do believe that growing up making these sorts of choices in-game greatly influenced my ability as an adult to make smart choices about where to invest my money. I ask the same questions - what expenditures will make it easier to make more money? What purchases will have the largest impact on my quality of life?

2 Reply ( 1 ) Share:
Opinion 1 year ago
expert answer
KAJAL SENGUPTA expert
KAJAL SENGUPTA Online Physics Teacher New Delhi, IN

My parents did it in a simple way-by allowing us to handle money from a very young age in a responsible way. In the beginning of each month we were given money for our expenses and we were supposed to manage on our own. If we managed to save any money it was ours without any questions asked. I did the same with my daughter and never regretted.

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Experience 1 year ago
Rajesh Kavathekar
Rajesh Kavathekar Father of a teenager Harrow, GB

Best way I found is to Involve them in your monthly budgeting exercise right from early days. Surprisingly they understand the terms savings, emergency funds, education funds, gifts, groceries, utility bills, much faster than you would imagine. My son (is 17 now) is so sensitive of needless expenses that he is careful about spending time with certain type friends, as he knows they tend to be extravagant in spending.. I never told him that but he probably picked it up from our monthly discussions... He has his own bank account since 13 and manages it quite well.

1 Reply Share:
Experience 11 months ago
expert answer
Lynn Schreiber expert
Lynn Schreiber Social Media Trainer Dundee, GB
Social Media expert

We give our children a generous amount of pocket money, of which they have to save at least 50%. In reality, they save most of it.

I think it is important that they learn to save money, not just spend their pocket money as they receive it. Learning to save for a much wanted item is empowering and a lesson for life.

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Experience 1 year ago
expert answer
Louise Hill expert
Louise Hill COO, goHenry London, GB
Education expert

The phrase 'money doesn't grow on trees', as strange as it sounds, exists because sometimes there is lack of understanding on the part of children in terms of how money works, but similarly, there can be a lack of educating on the parent’s part to explain the basics of good money management.

At PktMny we believe that the value of money is best learned by children going through a liberating yet structured way of engaging with real money.The key is to empower your children to take responsibility for their own money, to make their own choices and to encourage them to earn money and save and spend responsibly.

Some crucial ways to help children learn the value of money and savings include starting to talk about money however old your child is and not assuming because they are little they can’t understand.

Finding ways to help your child earn money for themselves and then setting short and long term savings goals is a crucial part of the 'earn, save, spend' cycle too. However, the journey doesn't end with saving, as an important element is to then help your children to spend what they have saved. Once they have spent it, and all their money has gone, your child needs to repeat this cycle so that they understand the process of waiting and building up savings. The entire process is made so much easier through technology, empowering children to learn to take responsibility for their own money, but under the watchful eye of parents and within a safe environment.

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Opinion 8 months ago

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