Kids Money Habits

All parents worry about their children’s future. Housing is getting out of reach, employment is insecure, and retirement seems an impossible dream. The rising generation is the first for many decades who expect to be worse off than their parents. But even those parents who cannot buy their kids into the housing market or promise them a hefty inheritance can still make a difference – by setting an example of good money management.


The easiest lesson that children can learn from you is that saving pays off. Talk to them about your savings account and how and why you use it. The idea of saving for a rainy day is beyond most children and teenagers, so get them to set a goal appropriate to their age: a more expensive toy for young children, or driving lessons for teenagers, maybe.

When they are learning percentages at school get them aware of compound interest. Interest rates may be low now, but the day will return when they will make saving a winner.

Shop Around

Your kids can learn from you the importance of shopping around. If they have no idea how much your heating bill is, you can get them to share the job of looking at the comparison websites when you review your supply – they may be astonished how much you can save.

Some costs are particularly high for young people, notably car insurance. You can learn more together about the options that will directly affect them when they start to drive.

Budget and Prioritise

Gather round the kitchen table from time to time and work on the family budget. List in general terms the money coming in and where it goes out. The children will quickly understand the relevance of Mr Micawber’s advice.

At the same time, you can discuss the difference between wants and needs. You can visually identify those items that are not negotiable, and distinguish them from those that can be reduced or cut.

Managing Credit

An important skill is knowing when credit is a good idea and when it is not. Make it clear that you do not borrow money to buy things that are not essential. On the other hand, some major purchases are almost impossible without credit, and some will generate income to pay for themselves, at least in part.

Help them to understand that when an item is purchased on credit it becomes an expense which is unavoidable, so it’s probably not a good idea to let them get into the habit of borrowing from you!

Sharing Economy

The heart of setting a good financial example to your family is the art of sharing the job. For a child, accepting a parent’s transition, from the limitless supplier of everything to an ordinary person with all the limitations of life, is quite a tough experience, but it has to be accomplished sooner or later. Enlisting your kids, at an appropriate time, into understanding the family finances is a step on their way to responsible adulthood.


Natasha Barker taught her kids that money doesn’t grow on trees from a young age. She has 3 kids ranging from age from 3 to 15 and works as a personal finance consultant so is passionate that her kids understand money and how to manage it.