Collaborative post by another author. Passing on your wisdom for all sorts of vital life lessons is part and parcel of being a parent. This couldn’t be truer when it comes to finances. From the importance of responsible spending to how to set their own financial goals, this knowledge will give your kids a sound start in life and a foundation for building their own finances in the future.

Almost 92 percent of parents say that the cost-of-living crisis has encouraged them to discuss finances with their children more openly, when previously less than half of kids in the UK had been financially educated. 

Though it might seem daunting at first, you can make a serious topic like finances enjoyable to learn about. Here are some popular strategies: 

Quizzes 

A quiz is a simple tool that gets younger children excited to learn the basics of money. 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 incentivise your quizzes and create some friendly 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. This includes 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. 

Ask your children what their favourite goodies are and help them understand how many of these items they could buy if they didn’t 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 to your children. Emphasise the difference between items you need every day, such as clothes and food, and those that you want but don’t need, such as toys and sweets. 

This will introduce them to the concept of restraint and how to avoid impulsive shopping. It can be a hard pill to swallow but getting them into the habit of saving rather than spending whenever they want will help them in the long run. 

Weekly shops 

Getting the kids 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. Get them to add up as you go from aisle to aisle and decide the best value price combinations.