Helping your Children and Grandchildren understand the value of money
Written by Mark Salter
Financial planning isn’t just about securing your own future —it’s also about passing on knowledge and experiences that empower the next generation. As a Certified Financial Planner, I believe that teaching children and grandchildren about money early can help them develop habits that lead to better outcomes financially. Here are practical ways to make these lessons engaging, age-appropriate and hopefully help make a lasting difference on how they manage money in the future.
Start with the Basics: Saving Before Spending
Introduce the concept of saving by using a simple jar system whether your saving into a money box, savings account or junior ISA. Start by explaining that money earned (perhaps through pocket money or small tasks which are rewarded) or received through gifts should be divided into categories: saving for something special, spending and the future. For younger children, visual aids like labelled jars make the process tangible. This teaches them that not everything they receive should be spent and saving should be prioritised over spending.
Explain Compound Interest in a Simple and Understandable Way
One of the most powerful financial concepts is compound interest. Use stories or create relatable concepts: “If you plant a seed and water it, it grows into a tree that gives you more seeds.” Show how money grows over time when left in a savings account or invested. Older children can use online calculators to see how £10 invested today can become much more in the future.
Introduce them to Budgeting
Try giving children a small allowance and help them with creating a mini-budget. Encourage them to plan for short-term goals (like buying a toy) and long-term goals (like saving for a bike). This hands-on experience helps them understand delayed gratification and the importance of planning.
Teach the Value of Investing
For teens and young adults, explain that investing is about making money work harder for you. Use examples like buying shares in companies they might know or buy products from —such as tech, toy or food and drink brands. Discuss the difference between saving (safe, slow growth) and investing (riskier, but potentially higher returns).
Model Good Behaviour
Children learn best by observing. Share your own financial habits—saving for emergencies and for holidays or buying investments. Transparency builds trust and reinforces the importance of planning.
Make It Fun and Ongoing
Turn financial education into games or challenges. Apps and online tools can simulate investing or budgeting in a fun way. Keep conversations about money positive and speak to them regularly about it, so it becomes a natural part of life.
Financial planning week runs from January 26th to February 1st 2026 and with the theme of ‘financial planning through life stages’, what better time to raise awareness of the benefits of financial planning to the next generation.