It’s easy to assume that your child has little interest in learning about money. You might think they’re too young to grasp core concepts, or that financial education can wait until they’re older.
However, the reality is very different.
Smart Monies reveals that 84% of kids aged between 6 and 18 say they want to learn more about how money works.
This is more important than ever, given that a report from Santander found that while many young adults feel confident about managing money:
- 76% have never paid a bill
- 77% haven’t set aside funds for unexpected expenses
- 79% have never made a budget.
If you start conversations about money early, you could help equip your children with the tools they’ll need to confidently manage their wealth later in life.
Conveniently, 9 – 13 June 2025 is My Money Week, a national campaign designed to get young people excited about, and interested in, financial matters.
So, this could be the ideal time to explore ways to improve your children’s or grandchildren’s financial literacy. Continue reading to find out how.
You might be able to improve a child’s financial literacy with simple lessons at home
When you introduce financial concepts to children, there’s little point in diving into highly complex topics.
Instead, you might want to start with simple and practical ideas that they can understand and relate to.
One concept that is surprisingly easy to explain is compound growth, and you could do so with a game such as the “bank of sweets”.
Start by giving your child a small number of their favourite sweets (or something healthier!) and encouraging them to deposit them in a hypothetical “bank”.
If they accumulate 20 sweets and leave them untouched, you then add two more, and next time, three. If they eat 10 of their sweets, they will only get one back the following week.
This could show how delayed gratification could lead to greater rewards in the long run, and give them an idea of how compound growth works when you save or invest money.
Then, you might want to discuss the difference between “wants” and “needs”. The next time your child asks to buy something, ask whether it’s something they genuinely need or simply something they’d like to have.
This could help your child develop a more thoughtful approach to spending, potentially reducing the chances they take on high-interest debt in the future.
It might also help to reinforce the value of regular saving.
By using a piggy bank or child-friendly saving app, you could encourage your child to save up for something they want, whether that’s a toy, game, or a day out.
Asking them to track their progress could be a practical way to teach patience, planning, and the idea that they can work towards goals they might initially think are out of reach.
Junior ISAs could be a practical way to save for your children, all while reinforcing lessons
While piggy banks can be helpful tools to help younger children learn about saving, older children may benefit from Junior Individual Savings Accounts (JISAs).
JISAs – which were introduced in 2011 to replace Child Trust Funds – allow you to put money aside for children.
They are as tax-efficient as their adult counterparts, meaning your child’s money can generate growth free from Capital Gains Tax, Dividend Tax, and Income Tax.
As of 2025/26, you can pay in up to £9,000 each year, and your child can typically access the funds once they reach the age of 18.
It’s worth remembering that there are two primary forms of JISA:
- Cash
- Stocks and Shares
Cash JISAs allow you to simply save money for your children while earning interest, much like a regular savings account, but with the added tax benefits.
This could be a helpful tool to teach your children about the value of putting money aside and letting it grow over time. You could even involve them in setting savings targets and checking how their balance increases over the months and years.
Conversely, a Stocks and Shares JISA allows you to invest on your child’s behalf. This means you can place money in funds, shares, or other investments to potentially generate higher long-term growth than cash savings typically offer.
While this does come with risk, it also could be a helpful way to introduce your child to vital investing concepts, such as managing risk, staying invested through volatility, and taking a long-term view.
Not only can using JISAs help your child learn about managing their wealth, but you can also accumulate a considerable fund for their future in the process.
When they’re older, they could use the wealth saved in their JISA as a deposit for their first home, fund higher education, or even start a business.
You could always involve your adult children in conversations with your financial planner
While there are many conversations you can have at home to teach younger loved ones about wealth, you might want to introduce adult children to your financial planner.
Bringing them into conversations about your family finances may help them see how you manage your money, set goals, and make decisions. This could demystify what can seem like a complex topic and help them make more informed decisions about managing their own assets.
Even if you prefer to keep your finances private, your planner could still help you think through some of the best ways to build financial security for your younger loved ones.
And, if your child is earning significantly and needs independent support, your financial planner could work with them to build wealth from early in their life.
To find out how we can help, email contactme@kbafinancial.com or call us on 01942 889 883.
Please note
This article is for general information only and does not constitute advice. The information is aimed at retail clients only.
All information is correct at the time of writing and is subject to change in the future.
The value of investments and any income from them can fall as well as rise and you may not get back the original amount invested.
An ISA is a medium to long term investment, which aims to increase the value of the money you invest for growth or income or both. The value of your investments and any income from them can fall as well as rise. You may not get back the amount you invested.
HM Revenue and Customs’ practice and the law relating to taxation are complex and subject to individual circumstances and changes which cannot be foreseen.
Approved by The Openwork Partnership on 14/05/2025.