Money might seem like a grownbup topic, but kids as young as five can start learning the basics in fun, age appropriate ways. If you’ve ever wondered whether your child is too young to understand money, you’re not alone. Many parents feel the same, but research shows that children begin forming money habits as early as seven.
In this guide, I’ll share easy, playful, and practical activities you can use at home to help your child understand money. These ideas are based on expert advice from trusted UK sources and my own experience as a parent. By the end, you’ll have fun activities that teach essential money lessons without overwhelming your child.
What Does Money Mean for Young Kids?
At ages five to seven, children don’t need to understand complex finances, but they can start grasping simple concepts:
- Money is used to buy things.
- You can only spend what you have.
- Saving means waiting for something you want.
According to MoneyHelper UK, early money lessons are most effective when taught through games, stories, and everyday activities. The goal is to build healthy habits, not to make them mini accountants.
Why Teach Money Skills Early?
Kids learn by watching. If your child sees you tapping a card or buying groceries, they’ll naturally be curious. Teaching money lessons early helps them:
- Build good saving habits.
- Learn patience and delayed gratification.
- Understand the value of choices (if you buy one thing, you might not afford another).
Parent Tip: “Children copy us more than we think. Talking about money at the supermarket or during play makes lessons feel natural.”
One of the most common questions parents have is, “Should I give my child pocket money, and if so, how much?” In the UK, many families start giving children pocket money around age five or six, often between £2 and £5 per week. The amount matters less than the consistency what children learn is that money has a limit, and choices have consequences.
There are two common approaches:
- Pocket money with no conditions: Some parents prefer giving a set amount each week without tying it to chores. This teaches children how to manage money independently of household duties.
- Pocket money linked to chores: Other families connect money to tasks like tidying toys or setting the table. This reinforces the idea that money is earned through effort.
Neither method is “better” what matters is what fits your family values. You could even try a mix: a small guaranteed allowance plus a chance to earn extra through special tasks.
Signs Your Child is Ready to Learn
Not sure if your five or six year old is ready? Look for these everyday signs:
- They ask, “How much does this cost?”
- They compare toys or snacks and wonder why prices differ.
- They’ve started trading toys, stickers, or cards with friends.
Reassurance: Even if they’re not asking yet, playful money lessons can spark curiosity.
Fun and Practical Money Activities for Kids
1. At Home Activities
Play Shop with Coins and Notes
- Set up a pretend shop with toys or snacks.
- Give your child coins to “buy” items.
- Let them practice counting change.
Expert Tip: “Hands on activities help children connect numbers to real world value.” NHS Better Health for Families.
Saving Jar Game
- Label three jars: Spend, Save, and Share.
- Every time your child gets pocket money, guide them to split it between jars.
2. Outdoor or Everyday Activities
Supermarket Helper
- Give your child a small budget (£1–2).
- Let them choose a snack within the budget.
- Teach them to compare prices and make choices.
Parent Tip: “We turned our grocery run into a money game. My son now looks for the best value biscuit pack.”
Coin Treasure Hunt
- Hide coins around the house or garden.
- Once found, help your child count and sort them.
- Use this as a chance to talk about different values.
3. Storytelling and Games
Money Storybooks
Read UK based children’s books about money, like Save It! by Cinders McLeod. Stories help children understand saving and spending through characters they love.
Board Games
Classic games like Monopoly Junior or The Game of Life Junior introduce decision making and money management in a playful way.
Today’s children are growing up in a world where cash is used less often. Most parents pay with cards, phones, or even online shopping apps, and kids quickly notice. It’s important to explain that “tapping a card” still means money is leaving your account.
Ways to Introduce Digital Money:
- Show your child your bank app balance before and after a small purchase to demonstrate how money decreases.
- Explain the difference between cash you can hold and digital money that exists on a screen.
- Use prepaid pocket money cards designed for children, such as GoHenry or RoosterMoney in the UK, which allow kids to practise spending safely with parental controls.
Chart: Simple Money Skills by Age
| Age Group | Key Skills to Teach | Fun Activity Example |
| 5 years | Recognising coins & notes | Coin treasure hunt |
| 6 years | Basic spending choices | Supermarket snack budget |
| 7 years | Saving for goals | Spend/Save/Share jars |
When to Guide and When to Step Back
It’s natural to want to jump in and correct your child. But money lessons stick better when they make their own choices sometimes even mistakes.
Pro Tip: If your child spends all their pocket money on sweets and has nothing left later, let it happen. The lesson of waiting until next week is powerful and long lasting.
Safety Tips for Teaching Money
- Do encourage handling real coins but supervise, especially with younger kids.
- Don’t overwhelm them with too many rules keep it playful.
- Do use consistent language (“save,” “spend,” “share”).
- Don’t criticise mistakes use them as learning opportunities.
Supporting Parents Emotionally
It’s easy to feel like you’re not teaching “enough” or that money talks are too advanced. Please remember: you don’t have to be a finance expert to help your child. What matters most is your consistency and openness.
Reassurance: Every small activity whether a pretend shop or a jar of coins helps your child build a foundation for lifelong money confidence.
FAQs about Teaching Money to Kids
Should I link chores to pocket money?
This depends on your parenting style. Linking money to chores can teach children the value of hard work, but a fixed allowance teaches budgeting skills without pressure. Some families combine both.
What if my child loses money?
It’s tempting to replace it immediately, but letting them feel the consequence gently teaches responsibility. Consider giving smaller amounts until they learn to take care of it.
How do I explain “wants” vs “needs”?
An easy way is to ask your child: “Do we need this to live, or do we just want it for fun?” Simple discussions like this help children understand priorities.
Can I teach generosity with money?
Yes! Encourage children to put a small part of their pocket money in a “Share” jar for charity, school fundraisers, or even to buy a small gift for a sibling. It builds empathy as well as money skills.
Conclusion
Starting money lessons early doesn’t mean giving lectures it means turning everyday moments into playful learning. From setting up a pretend shop to letting your child choose snacks at the supermarket, each activity builds confidence and responsibility.
As a parent, I’ve seen first hand how small, consistent lessons can spark curiosity and independence in children. So next time you hand your child a coin, remember you’re giving them more than money. You’re giving them skills for life.
