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Teaching your children about money can be difficult, as it's not always easy to know what you should teach them, and what they will learn on their own as they grow. However, it you keep your lessons clear and simple, your child is never too young to learn the basics about how money works, how to handle it, and why it’s important.

Start with these five lessons about money, and start your children on the path towards good financial health.

1.     Money is earned

Perhaps the most important lesson of all is to teach them that money doesn’t come for free. The earlier they learn that money needs to be earned, the sooner they will understand the value of every pound.

You can teach this lesson very simply, by requiring that they earn their allowance instead of just giving it to them. For younger children, earning their money on a weekly basis by doing simple jobs - like helping to set the table for dinner – can help them understand the direct work and reward relationship. Obviously, the older your child is, the more complex the tasks can be, and you can pay them their allowance on a monthly basis instead of a weekly one.

2.     Budgets matter

Teach them that when money runs out it isn’t just automatically replaced. When they are younger teach them to make their allowance last through the week. The older they get, stretch the time between payments to two-weekly or monthly cycles.

You can do this by getting them into the habit of recording their spending in a diary, whilst they are too young to have their own savings account, and once they are of age show them how important it is to study each prior month’s spending statistics to understand where their money is being spent.

3.     Saving is important

When it comes to teaching your children how to save, it’s always best to lead by example. You many not want your children to look over your bank statements, and depending on their age this may be of little use anyway. It’s difficult to demonstrate electronic saving in a clear fashion, so it may pay to set up a physical savings jar in your home.

Do this with your children so they are a part of the process. Make sure that you tape both an over-all "savings goal", and a "savings rule" to it (ie. “Goal: Christmas Present Savings”, “rule: save £3 a day”). Once this is done, remember to honour your savings rules and make sure your children see you doing this.

At the end of your goal period go through the contents of the jar with them to demonstrate the power of saving, and how much money you can put aside if you have a clear savings goal. As they grow older, but before they can have an electronic account, make sure to create individual savings jars with them, each with their own goal and set of rules.

4.     Want is different from need

This can be another difficult lesson to teach demonstrably. However, there are a number of ways that you can choose to approach it. Firstly, if their allowance runs out early, then be firm with them and refuse to give them additional funds. With each purchase they make, ask them to tell you exactly why they’re buying it, if they truly need it, and what they may have to go without in the future if they buy it. This teaches conscious consumerism.

5.     Teach them to invest

Finally, teach them the importance of investing. Again this can be difficult to teach younger children, but the earlier they learn the more comfortable they will be with investment practices in later life.

A good way of tackling this is to open an investment account for them when they are born, or are still very young, and to invest a set amount of money each month so that it slowly begins to accumulate. Then, when they are old enough, sit down with them on a monthly basis and look through their portfolio with them to show them what has gone up and down, and how investment works.

If you invest with Oval you can also show them how your investments move on a weekly or monthly basis too. By making investment accessible to them through your phone or computer, you are normalising the concept of investment and setting them up for the future.


Your capital is at risk, past performance is not indicative of future performance. Oval Money does not provide financial advice. If you need further information we suggest you look for expert advice.

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