Collaborative post by another author. Passing on your wisdom and teaching vital life lessons is a huge part of being a parent. This couldn't be more true when it comes to finances. Teaching your children about responsible spending and how to set their own financial goals can give them a sound start in life and a strong foundation for the future.

The rising cost of living has encouraged many of us to discuss finances with our children more openly, but teaching them about money does not have to be a scary or boring topic. It can actually be a fun part of your family life. Here are some of our favourite ways to teach children about money.

Making Money Lessons Fun

Quizzes 

A quiz is a simple tool that gets younger children excited to learn the basics of money. You can keep the questions simple at first with examples such as ‘What is a bank?’ or ‘Which coin will get you the most sweets?’. You could also make it a fun competition between siblings with some rewards and treats. With older children, you could introduce more difficult concepts that they are likely going to be encountering soon, such as how to improve your credit score, mortgages and how to get the best rates.

Budget 

Budgeting can be helpful for children of any age and you can introduce the concept using pocket money and piggy banks. You can help them understand the cost of items by encouraging them to save some of their pocket money to make bigger purchases further down the line. 

A fun exercise is to ask your children what their favourite goodies are and help them understand how many of these items they could buy if they did not spend all their pocket money every time. If you’re feeling ambitious, you could help them think of one thing they would like to save up for over a few months and help them make a budget.

Needs vs. Wants 

Teaching healthy financial habits is all about explaining the difference between needs and wants. You can emphasise the difference between items you need every day, such as clothes and food, and those that you want but do not need, such as toys and sweets. This will introduce them to the concept of restraint and how to avoid impulsive shopping. Getting them into the habit of saving rather than spending whenever they want will help them in the long run.

Weekly shops 

Getting your children involved in your weekly shop is a great exercise to get them familiar with what things cost and how to choose items with the best value for money. Not only will they start to understand the difference between brands, but it can also help your children with their maths skills. You can ask them to add up as you go from aisle to aisle and decide the best value price combinations.