How to teach children the real value of money
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A study has shown that by the age of seven they can grasp the lessons they need to learn to avoid financial problems in the future
The early experiences children have with money can significantly impact their financial behaviors as adults, according to research by the University of Cambridge for the UK’s MoneyHelper service. By age seven, children are capable of understanding the value of money, the concept of delayed gratification, and the consequences of financial decisions. Encouraging children to handle money and make age-appropriate financial decisions can instill positive money habits, helping them plan ahead and regulate impulses.
Juliette Collier of the Campaign for Learning advocates giving young children coins to spend or save, allowing them to make decisions and experience outcomes. Educational resources like Valuesmoneyandme.co.uk and FunKidsLive.com offer free activities to teach children money concepts. Simple household activities, such as classifying items into necessities and luxuries or discussing hidden costs like utilities, can further financial understanding.
John Lee suggests opening a Junior ISA and involving children in investments to teach them about assets and societal impacts. Charity shops provide opportunities for children to spend pocket money and discuss charitable giving. Overall, integrating practical and context-based money lessons in daily life can equip children with essential financial skills.