5 money chats to have with kids

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With average household savings at a record low [i] and nearly one-in-three adults in England and Northern Ireland (NI) unable to work out the correct change from a shopping trip [ii] , teaching children and young people about money is more important than ever.

Does your seven year old know the difference between things they want and things they need? Does your 16 year old have a grasp of what’s on their payslip? We’ve put together a short guide to help you have relevant and useful conversations with the children and young people in your life about money.

Here’s our quick guide to five things we think children and young people should know about money, and what you can do to help them:


By the age of 7… children should know the difference between wants and needs

Understanding the differences between wants and needs is a good place to start and can help children understand why they can’t have everything!

What can I do to help them?

  • Talk to your children about what they enjoyed spending their birthday, Christmas or holiday money on. Get them to think about the things that parents and carers spend money on.
  • You could have a walk around your home and get children to point out things that are ‘needs’ and things that are ‘wants’.
  • Explain that families have to pay for lots of things they need, like food, electricity, and a house. What do they think happens to the things people want, when they have to pay for lots of things that they need?
  • Explain that this is called budgeting – making sure there is enough money to pay for the things we need and carefully making sure that we don’t spend too much on things that we don’t really need, but just want.

By the age of 11… children should be able to create and understand a basic budget

As children grow older they have more opportunity to make choices on how to spend money. Budgeting is a crucial skill when planning how and what to use money for.

What can I do to help them?

  • Have a chat about holidays. Ask them about how they think you make decisions about where to go on holiday and what to do?
  • Give them a holiday budget – such as £1,000 in total for a week. Get them to think about all the things they would need for a holiday – flights and a place to stay, sun cream, a swimming costume, beach towels - and have a go at writing a budget.
  • Explain that lots of things in life need budgeting - running a house, owning a car, planning a party and so on. It’s better to plan a budget in advance so you have enough money for all the things that you need.
MoneyHelper has some great budgeting tools to help with these activities.

By the age of 14… young teens should understand the basics of credit and debt

Understanding credit and debt becomes increasingly important as kids move from handling cash to moving numbers around on a screen and buying things online. Four in ten young people aged 7-17 have paid for products or services online, many without the permission or knowledge of their parents.[iii]

What can I do to help them?

Talk to your young teens about credit and debt:

  • Do they know what credit and debt is? Using credit should be carefully considered as it can end up costing a lot of money!
  • Explain how credit cards work. Spending more than you can afford by using a credit card or loan means that you’ll have to pay back more money – this is called interest.

By the age of 16… teens should be able to read a payslip

Payslips can be confusing for many of us. By the age of 16 many teens have started working part-time, so understanding a payslip means that they can independently check it and understand the difference between salary and take home pay. It also provides a useful intro to tax and National Insurance.

What can I do to help them?

  • If the teens in your life have already started working, take them through their own pay slip. If not, then you could use your own, or access an example online.
  • Some of the sections of a payslip can be confusing. If you need clarity then we have some helpful info.

By the age of 19… young adults should understand the basics of pensions

Retirement might seem a long time off for a 19 year old, but getting a good understanding of pensions now will stand these young adults in good stead for the future.

What can I do to help them?

We’re making a difference in schools

We take the financial education of the next generation seriously at YBS, so we are doing something about it. Money Minds is an innovative financial education programme developed to teach children and young people about money. The Money Minds sessions are delivered free of charge by YBS colleagues in schools. All of our workshops are designed to fit in a one hour time slot to complement the curriculum from age 5-19.

Since 2015, our colleagues have taught over 20,000 children and young people about all of the above topics and more.

 To find out more about our financial education programme, go to our Money Minds page.

Find out more about our new savings accounts for children.




[i]  Source: Office of National Statistics, Household Savings Ratio: 3.8% 2018, Q3 compared with 3.6 1963, Q2.