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Teaching Your Kids To Budget

piggy bank calculator pennies budget


It’s the school holidays and your kids are already bored. You’ve tried everything - days out, trips to the park and even got crafty with them, but they’re not amused. Why not teach your kids the basics about budgeting?

Budgeting At Home

Budgeting and financial education has begun in schools but there are still things you can do at home to teach your kids how to manage their money more effectively. Here are some useful tips on how to get started!

Ages 4-7

From ages four to seven your kids are starting to understand the world and how things work. Answer any questions your children may have about money and try to do so honestly. Keep communication about money open, positive and factual to avoid scaring them. Some useful online games are:

Ages 7-12

Between the ages of seven and 12, start giving your child pocket money. This gives them some finances to play around with and spend. Alternatively, give your kids chores to do, rewarding them with pocket money when these are completed. This reiterates that if they want money, they have to work for it! The next time your child asks for something they want, encourage them to save for it with their pocket money. You can then talk about how much the item costs, how much money they have to spend now and what chores they’d have to complete to earn enough money to buy that item. Encourage them to open a savings account to store their money. You can then talk to them about different savings accounts and what they mean, for example the difference between a savings account and an ISA.

Ages 12-15

As your children get older, teaching your kids to budget gets harder! Start to explain to them what things you pay for around the house. Tell them about your rent or mortgage, what bills you have to pay and when. Explain about extras such as broadband and mobile phone costs and how you prioritise bills. Talk to them about the difference between credit and debit cards - that with a credit card you have to repay the amount you borrowed, plus the extra interest, whereas with a debit card you pay from your own money.

Ages 15 -18

From this age you can start getting more technical, showing them your wage slips to explain how much you get paid, how much you’re paid after tax and what tax is. Tell them how much you spend on groceries a week, what the common bills are and how much these cost. The more detail you can give the better. If you keep track of your accounts on paper, show them how you budget and encourage them to do the same. If your child starts working, use their wage as an example of what they’d have to pay for if they lived independently (rent, groceries, mobile phones etc). Some parents may even take money from their child’s wage to get them used to the expenses they’ll come across when they get older.

18 Onwards

This is a difficult period as your child may now start working full time or preparing for further education but it‘s time to encourage financial independence. Some parents may wish to start charging their child rent (if they are working) to help with family expenses. If they are moving onto further education and/or living away from home, it’s harder to teach about budgeting, but always be on hand to offer help or guidance should problems arise. Teaching your kids how to budget isn’t going to be easy but it will help them manage their finances later in life.

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