How to Talk to Kids About Money: Age-by-Age Guide

When's the right time to talk to your child about money? The answer: earlier than you think. But the conversation looks very different at age 5 versus age 15.

Many parents avoid money conversations entirely, worried they'll say the wrong thing or confuse their child. But financial literacy doesn't happen by accident—it's built through consistent, age-appropriate conversations starting young.

In this practical guide, we'll show you exactly what to talk about at each age, give you conversation starters, and help you build your child's financial confidence from primary school through to adulthood.

Quick summary: Start simple conversations about money around age 5, gradually introducing concepts like saving (ages 6-9), earning (ages 10-12), investing (ages 13-15), and financial independence (ages 16-17). The key is age-appropriate language and regular, casual conversations—not formal lectures.

Help your child learn about money interactively with Squids-In's age-appropriate financial education designed for children aged 10+.

Why Money Conversations Matter

The problem: Many children reach adulthood with zero financial education. They receive their first salary, student loan, or credit card with no framework for managing it.

The research: Studies show that children who discuss money with parents are more likely to:

• Save regularly as adults
• Avoid problem debt
• Make informed investment decisions
• Feel confident about financial choices

The opportunity: Your child's Junior ISA isn't just a savings vehicle—it's a teaching tool. Every deposit, every statement, every market fluctuation is a learning opportunity.

But many parents struggle with where to start. This guide gives you a practical framework.

Ages 5-6: Money Basics

What they can understand:

• Money buys things
• Different items cost different amounts
• We can't buy everything we want
• Sometimes we need to save for things

What to talk about:

"Money comes from work"

• "Mummy/Daddy goes to work to earn money"
• "We use that money to buy food, pay for our house, and buy things we need"

"Different things cost different amounts"

• At the shop: "This apple costs 50p, but this toy costs £10. That's 20 apples!"
• "Some things are expensive, some things are cheap"

"We can't buy everything"

• "We need to choose what we buy because we don't have enough money for everything"
• "We choose to buy food first, then toys if there's money left"

"Saving means waiting"

• "If we save our coins in this jar, we'll have enough for [toy] in a few weeks"
• Make saving visible—use a clear jar so they can see coins accumulating

Conversation starters:

• "Do you know where money comes from?"
• "Why do you think this costs more than that?"
• "Should we save this money or spend it today?"

Activities:

• Shopping trips: Let them pay with cash, receive change
• Coin jar: Save towards a specific small toy
• Play shop: Use toy money to practice buying/selling

What to avoid:

• Don't overshare financial stress ("We can't afford that" without context creates anxiety)
• Don't use money as a weapon ("You're costing us so much money")
• Don't lie ("We have no money" when you mean "We're choosing not to buy that")

Ages 7-9: Earning and Saving

What they can understand:

• Earning money through effort (pocket money, helping with tasks)
• Saving towards goals
• Delayed gratification (waiting for something better)
• Basic budgeting (splitting money into pots)

What to talk about:

"You can earn money"

• Consider pocket money (£1-3/week typical for this age)
• Link to age-appropriate tasks if desired (though some parents prefer unconditional pocket money)
• "If you save your pocket money for three weeks, you'll have enough for that book"

"Saving helps you buy bigger things"

• "You could buy small sweets today, or save for three weeks and buy the toy"
• Introduce the concept of goals: "What are you saving for?"

"Money decisions have trade-offs"

• "If you spend your £3 on this, you won't have it for that"
• "Which do you want more?"

"Banks keep money safe"

• "We keep our money in a bank, not under the mattress"
• "The bank keeps it safe and sometimes pays us a little extra for keeping it there" (simplified interest concept)

Conversation starters:

• "What would you like to save up for?"
• "If you had £10, what would you spend it on?"
• "Do you want to spend this pocket money now or save it?"

Activities:

• Three-jar system: Spend, Save, Give/Share
• Set a savings goal: Track progress weekly on a chart
• Compare prices: "This costs £5 here but £3 there—where should we buy it?"
• Library trips: Borrowing vs buying (value for money concept)

What to avoid:

• Don't bribe with money for every little task (creates transactional mindset)
• Don't rescue poor spending decisions (let them experience regret—it's educational)
• Don't make pocket money contingent on perfect behaviour (separates money from work ethic)

Ages 10-12: Investment Basics and Long-Term Thinking

What they can understand:

• Money can grow over time
• Basic concept of investing
• Compound interest (simplified)
• Long-term vs short-term money goals

What to talk about:

"Your Junior ISA is investing for your future"

• "We've been putting money aside for you since you were born"
• "Right now you have [amount] saved for when you're older"
• "This money is invested, which means it can grow"

"Investing means buying small pieces of companies"

• "When you invest, you buy tiny pieces of companies like Apple or Lego"
• "If the companies do well, your investment grows"
• "Sometimes it goes down, but over many years it usually goes up"

"Compound growth is like a snowball"

• "If you invest £100 and it grows 7% in one year, you'll have £107"
• "Next year, the £107 grows 7%, so you get more growth"
• "After many years, your money can become much bigger"

"Short-term money vs long-term money"

• "Money for buying things this month is different from money for university"
• "Long-term money can be invested because we don't need it yet"

Conversation starters:

• "Would you like to see how much is in your Junior ISA?"
• "Do you know what investing means?"
• "If you had £100, would you rather have £110 next year, or £200 in 10 years?"

Activities:

• Show them their Junior ISA statement
• Use the Time Machine calculator to show compound growth
• Complete simple investing lessons together (Squids-In offers age-appropriate content)
• Discuss brands they know: "You use an iPhone—Apple is a company you could invest in"

What to avoid:

• Don't overwhelm with complex financial jargon
• Don't make investing sound like gambling ("You might get rich!")
• Don't compare their savings to others ("Your friend has more")
• Don't share every market fluctuation ("Your ISA went down this week")

As we discussed in our guide to teaching kids about compound interest, this age is perfect for introducing growth concepts through visual examples and simple maths.

Ages 13-15: Market Concepts and Critical Thinking

What they can understand:

• Market cycles (ups and downs)
• Risk vs reward
• Diversification basics
• How investing relates to their goals
• Financial advertising and manipulation

What to talk about:

"Markets go up and down—that's normal"

• "Sometimes investments lose value temporarily, but over decades they tend to grow"
• "If the market drops, we don't panic—we wait for it to recover"
• "Your Junior ISA might be £5,000 one month and £4,700 the next, but by age 18 it could be £15,000"

"Diversification spreads risk"

• "Instead of investing everything in one company, we spread it across hundreds"
• "That way if one company fails, the others keep growing"
• "Your Junior ISA owns small pieces of thousands of companies"

"Risk and reward are connected"

• "Safe investments (like savings accounts) grow slowly"
• "Riskier investments (like stocks) can grow faster but go down sometimes"
• "For long-term goals, some risk makes sense because time smooths it out"

"Advertising wants your money"

• Discuss influencer marketing, social media ads, "must-have" products
• "Companies spend millions making you feel like you need their product"
• "Ask yourself: Do I actually need this, or do they just want me to buy it?"

"Earning, saving, and investing work together"

• "First you earn money through work"
• "Then you save some of it (we suggest 10-20%)"
• "Then you invest savings for long-term goals"

Conversation starters:

• "Your Junior ISA went up £200 this year—do you know why?"
• "If you had £1,000 right now, what would you do with it?"
• "Have you seen any adverts that made you want to buy something you don't need?"
• "What do you think you might use your Junior ISA money for at 18?"

Activities:

• Track their Junior ISA balance monthly together
• Discuss financial news in age-appropriate terms
• Practice budgeting with part-time job earnings
• Use investment apps with educational components (like Squids-In)
• Compare investment performance vs cash savings over time

What to avoid:

• Don't make money conversations feel like lectures
• Don't criticize their spending (guide instead: "Would you make that choice again?")
• Don't impose your financial beliefs without explaining why
• Don't use fear tactics ("You'll end up poor if you don't save!")

Ages 16-17: Real-World Preparation

What they can understand:

• Everything from earlier stages, plus:
• Part-time income and taxes
• Credit and debt
• Student finance
• Budgeting independently
• Account management
• Financial products (current accounts, cards)

What to talk about:

"Your Junior ISA becomes yours at 18"

• "When you turn 18, you'll have full control of your Junior ISA"
• "Right now it has [amount]—what might you use it for?"
• "You could withdraw it all, keep it invested, or do something in between"
• "If you leave it invested, it keeps growing tax-free"

"Understanding payslips and taxes"

• If they have part-time work: Review their first payslip together
• "This is your gross pay (before tax), this is what you actually receive"
• "Even though taxes feel annoying, they pay for schools, hospitals, roads"

"Credit cards and debt"

• "Credit cards let you borrow money—but you have to pay it back with interest"
• "Interest means you pay back more than you borrowed"
• "If you borrow £100 at 20% interest and don't pay it back, you could owe £120"
• "The golden rule: Only borrow what you can repay in full each month"

"Student finance isn't like other debt"

• If university-bound: "Student loans work differently from normal debt"
• "You only repay when you earn above a threshold"
• "It doesn't affect your credit score like other debt"
• "Many people never pay it all back—that's built into the system"

"Budgeting for independence"

• "If you moved out, how much would you need each month?"
• Discuss: rent, food, utilities, transport, phone, entertainment
• "Most adults spend about 50% on needs, 30% on wants, 20% on savings"

Conversation starters:

• "What do you plan to do with your Junior ISA at 18?"
• "Have you thought about budgeting for university or moving out?"
• "Do you understand how your payslip works?"
• "What questions do you have about managing money as an adult?"

Activities:

• Create a realistic budget for their first year of independence
• Review their Junior ISA together and discuss options
• Open their first current account together (if not already done)
• Practice splitting income into needs/wants/savings
• Calculate total university costs vs apprenticeship earnings
• Discuss major purchases (car, gap year) and how to fund them

What to avoid:

• Don't make university seem financially terrifying
• Don't impose your path ("You must go to university" or "You must not take debt")
• Don't shield them from financial realities (rent costs, living expenses)
• Don't take over their financial decisions—guide but let them choose

Universal Principles Across All Ages

1. Keep it casual, not formal Money conversations work best as part of everyday life, not sit-down lectures.

• In the car: "I'm stopping for petrol—do you know why it costs different amounts on different days?"
• At the shop: "I'm comparing prices—why do you think this one costs more?"
• Watching TV: "That advert is trying to make you want the product—did you notice how?"

2. Match language to their age

• Age 6: "We're saving coins for your toy"
• Age 10: "Your Junior ISA is invested in companies"
• Age 16: "Your portfolio includes global equity index funds with 0.23% fees"

3. Be honest but age-appropriate

• Don't lie, but don't overshare
• "We're choosing not to buy that right now" is better than "We can't afford anything"
• "We're saving for a family holiday" is better than detailed budget stress

4. Show, don't just tell

• Let them see you comparing prices, using banking apps, reviewing statements
• Involve them in financial decisions: "Should we eat out or save that money?"
• Model good financial behaviour—they learn more from watching than listening

5. Encourage questions

• "That's a great question—I'm not sure. Let's find out together"
• Make it safe to ask about money without judgment
• Admit when you don't know something

6. Celebrate milestones

• First £100 saved
• First payslip
• Using a Junior ISA calculator
• Choosing not to buy something impulsively
• Understanding a new financial concept

Common Questions Parents Ask

Q: Should I tell my child exactly how much I earn?

A: It depends on age and context. Young children don't need specific numbers. Teenagers can handle more transparency, especially if framed educationally: "I earn £X per year. After tax, that's £Y per month. Here's how we budget it." Avoid making it feel like boasting or complaining.

Q: What if I'm not good with money myself?

A: Perfect opportunity to learn together. "I'm not great with investing either—let's figure this out as a team." Children benefit from seeing parents learn and improve. Your mistakes can be teaching moments if framed right.

Q: Should I use pocket money to teach money management?

A: Pocket money is a useful tool but not essential. If you do, keep it age-appropriate (£1-3/week for 7-9 year olds, £5-10/week for 13-15). Some parents link it to tasks, others give it unconditionally. Both approaches can work.

Q: My child wants expensive things their friends have. How do I handle it?

A: Acknowledge the feeling, explain the choice: "I understand you want those trainers. We're choosing to spend our money on [family holiday/university savings/etc] instead. You could save your birthday money for them if they're really important to you." Teaching priorities is more valuable than just saying no.

Q: When should I let them make financial mistakes?

A: Start small. A 7-year-old blowing £3 pocket money on something they regret is a valuable lesson. A 17-year-old making a £500 mistake with their part-time earnings is more concerning. Scale the risk to their age and let natural consequences teach.

Q: Should I pay them for household chores?

A: There's no universal right answer. Some families tie pocket money to tasks (teaching work ethic), others give pocket money unconditionally and expect chores as family contribution. Both can teach valuable lessons—pick what feels right for your family values.

Making It Stick: Ongoing Money Conversations

Don't expect one talk to cover it. Financial literacy builds through hundreds of small conversations over years.

Weekly opportunities:

• Pocket money day: "What will you do with this week's money?"
• Shopping trips: Price comparisons, budgeting discussions
• Family meetings: Involve children in age-appropriate financial decisions

Monthly opportunities:

• Review Junior ISA statement together (children 10+)
• Discuss upcoming expenses: "We're saving for holiday—how's our progress?"
• Set new savings goals

Annual opportunities:

• Birthday/Christmas: "What will you do with gift money?"
• Tax year end: "Let's check if we've used your full Junior ISA allowance"
• School year transitions: Update age-appropriate topics

Teachable moments:

• Market news: "The stock market went down—do you know what that means?"
• Job changes: "I got a new job with higher pay—we'll save more now"
• Major purchases: "We're buying a car—here's how we budgeted for it"

Using Tools to Support Conversations

Interactive learning works better than lectures:

Rather than explaining compound interest for 20 minutes, show your child:

• Their Junior ISA balance
• The Time Machine calculator (what £100 becomes by age 65)
• Their virtual portfolio performance (if using educational apps)
• Interactive lessons they complete at their own pace

Apps like Squids-In are designed specifically for this—children complete gamified lessons, earn rewards, and see visual representations of financial concepts. Parents can participate too, creating shared learning experiences.

Join the Squids-In waiting list to access 190 interactive lessons designed for children aged 10+.

Key Takeaways

• Start earlier than you think - Even 5-year-olds can grasp basic money concepts

• Match conversations to their age - A 7-year-old needs different language than a 17-year-old

• Make it casual, not formal - Money conversations work best as part of everyday life, not sit-down lectures

• Show, don't just tell - Model good financial behaviour and involve children in real decisions

• Use their Junior ISA as a teaching tool - It's not just savings, it's a learning opportunity

• Let them make small mistakes - A £5 regret purchase at age 10 teaches more than any lecture

• Be honest but age-appropriate - Don't lie, but don't overshare adult financial stress

• Celebrate progress - First savings goal reached, first payslip earned, first wise spending decision

• Financial literacy builds slowly - Hundreds of small conversations over years, not one big talk

The goal isn't to create mini-economists. It's to raise adults who feel confident managing money, understand how it works, and make informed decisions.

As we covered in our Junior ISA mistakes guide, one of the biggest mistakes is not teaching your child about their money—leading to poor decisions at 18.

Next Steps: Start Today

This week:

1. Pick one conversation starter from your child's age group above
2. Find a natural opportunity (car journey, shopping trip, bedtime)
3. Have a 5-minute conversation—don't force it
4. Notice what questions they ask

This month:

1. If your child is 10+, show them their Junior ISA balance
2. Involve them in one age-appropriate financial decision
3. Consider setting a savings goal together
4. Look for teachable moments in everyday life

Ongoing:

1. Make money conversations a normal part of family life
2. Share your financial thinking process out loud
3. Answer questions honestly and age-appropriately
4. Adjust topics as they get older

The most powerful financial education happens through consistent, casual conversations over years—not one perfect talk.

Ready to support their learning with interactive content? Join the Squids-In waiting list for access to age-appropriate financial lessons designed specifically for children aged 10+.

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This article is for educational purposes only and should not be considered financial advice. Investment values can go down as well as up. Always research providers thoroughly and consider your own financial situation before investing.

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About Squids-In: The UK's first comprehensive financial education app designed specifically for children aged 10+. Instead of just talking about money, give your child interactive lessons, visual tools, and gamified learning that makes financial literacy engaging. Parents can participate too, creating natural opportunities for money conversations.

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• Teaching Kids About Compound Interest: Simple Explanations That Work
• Common Junior ISA Mistakes (And How to Avoid Them)
• Best Investment Apps for Families (2025 Review)
• What is a Junior ISA? Complete Guide for Parents
• How to Open a Junior ISA: Complete Step-by-Step Guide