Important money lessons for children

Three happy children looking content after finding out about money lessons for children.


Amanda Young

19th April 2017 at 6:00am

Creating good money habits in children is a challenge for many parents but it can help set them on a successful financial path for life. We ask Amanda Young at Standard Life Investments to share her experiences.

I learned how to be good with my finances thanks to my mother, and I am passing the habit on to my son now.

My mother taught me how to save from a very early age. By the time I was 12 she was giving me a monthly allowance. I thought I was a millionaire until I realised I couldn’t buy shampoo as I had spent all my money on a new dress.

I quickly learned how to budget for the month.

Some friends were given pretty much what they wanted. They now find balancing money difficult and have large debts on their credit cards.

Helping children understand the value of money shapes the rest of their lives

As a single mother, I have had to equate the value of money from quite early on. When my son doesn’t understand why I can’t be with him at home, I explain in basic terms that if I don’t work, I don’t earn.

The fact that I do means we can live in our house and have new toys and clothes.

Rewards can teach children how to save

I use marbles as part of a reward system with my son to help him learn the value of saving and loss.

I reward him with one for good behaviour but if he does something he shouldn’t or fails to listen after repeatedly asking (a common thing with boys), he will lose a marble after a warning.

Setting goals for children is effective

My son has a goal of how many marbles to collect. A few weeks ago he wanted water pistols and I told him he would need to collect 30 of them.

It took him a month but he did it.

It’s a great way to consistently incentivise good behaviour. It teaches him the value of trading something for what he really wants.


Children need to understand the importance of saving, not just spending

My son has a money-savvy piggy bank which has four compartments.

There is one for saving, one for spending, one for donating and one for investing. When he empties each of the compartments, he knows what is going to happen to the money.

I think this is a great way to help youngsters learn what happens when you put money aside.

Thinking about the long term is the next challenge

My son has had a bank account since he was born – my mother wrote a cheque to get him started. There is now quite a lot of money in it and I need to think about buying some investment products.

While saving is always good, interest rates are too low to keep abreast of inflation, so the next thing will be to teach him how to invest for the longer term. This is a harder concept to get through to him of course.

Read more about saving for children here.

My hopes for my son’s future: Work, save… and be healthy and happy

All parents want a secure future for their children. However, I want my son to understand the value of working hard but not being a slave to work.

I really want him to understand that living on credit is not healthy, too. If you want something, you have to work, save and earn it.

I also want him to know that happiness and values don’t come from owning things and that spending money on experiences, helping others and your health and well-being is far more rewarding.

Being financially stable is a privilege

Many people will never be lucky enough to experience financial stability.

I was brought up in Africa, where I could have been protected from the harsh truths of an unjust system, as many of my friends were.

My parents always showed me the realities of life and how to care for those less fortunate than myself. That is a lesson that money can’t buy.

I hope I can do the same for my son.


Join the conversation and follow us on twitter @StandardLifeUK and Facebook and let us know about some of your experiences learning to save or teaching your children life skills.

The information is based on our understanding in June 2016 and shouldn’t be taken as financial advice.