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Your child will now have an understanding about money. They’ll also be able to see that money isn’t just coins and notes. To help develop their understanding, we’ve got some useful tips to build on their knowledge. This is based on what your child may be learning in school.
Cash is easier for children to understand but they have probably seen you buy things with a card or a phone. Explain that there are other ways you can pay for things. Such as debit cards and credit cards.
Understanding that money doesn’t actually grow on trees and that you need to earn it, is an important life lesson. Explain how different jobs will pay different amounts. It may help them think about the type of job they might want to do in the future.
Your child will be able to understand that if they borrow something, they’ll need to give it back. Whether it’s a friend’s football or their colouring pens. Money is no different. Explain that you can borrow money if you don’t have enough, but it needs to be paid back. As an adult, this is likely to cost more as it’ll need to be paid back with interest charged. Borrowing can also cause money worries. It’s important to pay back the money you borrow by the terms agreed or you may get charged fees.
Your child will soon start getting swayed by advertising. Or pulled by peer pressure to get the latest trend in trainers or tech. Help your child understand the value of money. It’ll help them make smart decisions when buying something.
Finding a good deal is a great skill to have. Help your child understand that you can pay different prices for the same item, in different places.
At this age, children are aware of advertising. Talk to your children about how it’s designed to encourage people to spend. Look at adverts together and talk about whether it’s making them want what’s advertised. Is it something that they would save up for? Do they think it’s worth the money?
One way to encourage saving is to explain how interest can be a reward for saving. But, it can also be a charge on money that you borrow.
If you help your child understand how interest works, it will encourage them to save and see their money grow. It may also help them avoid extra costs in the future if they need to borrow money.