Why it matters to teach your kids about money
Building wealth is about passing on more than just money; it’s about passing on the means to more freedom, opportunity, and peace of mind. As your kids grow up, they’ll be confronted by a complex and confusing financial industry. It’s no wonder so many of us feel uncertain. By starting the conversation early, you give them the most valuable gift of all: confidence.
It’s not about jargon, it’s about values
You don’t need to teach your child about ETFs or ISAs right away. Start with the core philosophical ideas behind money.
Encourage them to see money differently. It’s not just something you spend; it’s a tool. Talk about the value of waiting for something bigger versus buying something small and impulsive now. This teaches patience and delayed gratification – two huge pillars of wealth building.
Use smart, clear language. Talk about saving, not just spending. Talk about how every time they put money aside, they are choosing to invest in a future version of themselves.
A Junior ISA can help you to put money aside for your child. It’ll be in their name, and everything you put in becomes theirs once they turn 18. With Moneybox, our Junior ISA is an investment account. Investing can be beneficial if there’s a while to go before your child turns 18 – say, five years or more – because it gives the money you add time to grow.
Capital at risk. All investing should be long term. The value of your investments can go up and down, and you may get back less than you invest. Tax treatment depends on individual circumstances and may be subject to change in the future.
Practical tips for every age
Keep the lessons practical and age-appropriate.
- Pocket money (ages 5-8): Use three jars: Spend, Save, and Give. This simple, visual system teaches them allocation and purpose. Make it a rule that they have to put a certain percentage into the Save jar first.
- The power of growth (ages 9-12): Introduce the idea of interest. This gives them an early, tangible experience of how money can grow over time – a gentle introduction to the concept of compounding.
- Real-world budgeting (teens): Give them a monthly budget for a specific category, like clothing or entertainment, and let them manage it. They’ll quickly learn the necessity of making choices and dealing with consequences. This is action-oriented and empowers them to make decisions.
Make it a family conversation
Don’t hide your own finances. When you’re at the supermarket, talk about the choices you’re making. When you pay a bill, explain what it is and why it matters. By making money conversations natural and relaxed, you take away the anxiety and uncertainty. You’re giving them the means to get more out of life.
We do not offer personal financial advice or make specific recommendations based on your individual circumstances. If needed, seek independent financial advice before making decisions regarding your financial goals.