When should you start talking to your child about financial management?

financial literacy in children

Money can be a difficult subject to broach, particularly in family settings. However, being open about finances with both your spouse and your children can help to breed a positive culture that encourages more healthy conversations as the little ones grow up and start to gain more financial independence at college and beyond. 


While you don’t want to disconcert them unnecessarily, the longer you shelter them from the topic, the higher the chances they could start to develop unhelpful habits with money.  In comparison, instilling the right values in them from an early age could set them up for a lifetime of financial stability. In this guide, we discuss how early you should introduce your children to this topic, and explore some of the things you might choose to discuss at this stage. 

When should these conversations start?

Ultimately, each family is different, and what feels right for one won’t necessarily be the best timing for another. From a young age, children will start to develop an understanding of basic math in the classroom, and using money as a conduit for enhancing their knowledge is a great way to introduce the topic. 


They will likely start to recognise money by two or three-years-old, but when they reach five or six, they will generally start to grasp the concept of money, and even begin to form opinions and attitudes towards it. Conversations at this stage should be kept fun and engaging – it’s generally advisable to save introducing more serious topics until they’re slightly older. 

The value of pocket money

Pocket money or an allowance is a great way to introduce children to the principles of financial management. Even if it’s a nominal amount of money you give them each week, giving them some level of responsibility will help to shape their attitudes towards money and the value of it. 


Again, there isn’t necessarily a right or wrong time to start giving your children some pocket money – so long as they understand the basic principles of adding and subtracting. However, according to one survey, 75% of parents first gave pocket money to their children between the ages of five and seven. Whether you tie it into their desire for a particular toy or item (and introduce them to the importance of saving) or perhaps reward them for helping out around the house, there are lots of helpful habits you can start to instill at this early stage. 

Take them shopping

While it’s a menial task for adults, don’t underestimate the value of taking your children on regular trips to the shop when trying to introduce them to the concepts of money and spending. Before you go, you could ask them to tear out coupons or bring along any vouchers you have. This not only makes them feel like they’re being helpful, but it also touches on the value of saving money. 


Similarly, you could ask for their help with writing your grocery list. This will encourage them to think carefully about ‘needs’ and ‘wants’, and introduce the principles of delayed gratification. At the shops, encourage them to help you look for different items while paying attention to the prices and sticking to your list. 

Giving them a head start

As your children start to grasp basic mathematical concepts, it can be a great opportunity to teach them the value of money. As they get older, these conversations will naturally evolve and touch on heavier financial topics, but starting early will encourage them to form healthy habits from a young age that they’ll hopefully cling onto throughout their lives. 


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