Money comes in many different forms, from physical coins and cash to digital payments and credit. As children grow up in an increasingly cashless society, it’s essential to educate them about the different ways we pay for goods and services. Understanding the evolution of money and the variety of payment methods available today will help set children up for financial responsibility and independence in the future. This article explores practical ways to teach children about the different forms of money and payments.
Physical Money
One of the best ways to introduce young children to money is through physical coins and notes. Giving children a piggy bank or money box to put coins into helps them connect the physical coins with saving and spending power. As they get older, let them handle and count out real coins and notes to understand their value. Take children shopping and let them hand over physical money at the checkout to cement the concept. Games that involve exchanging plastic or wooden play money also bring the idea to life. Seeing and touching physical money makes its value more concrete for children.
Digital Money
As children grow, introduce digital payments like debit cards, contactless and mobile payments. Explain how cards and payment apps connect to bank accounts that hold the money they represent digitally. Show children how you can tap a card instead of inserting it into a chip and pin machine for small contactless purchases. Let older children compare the convenience of carrying a single debit or credit card versus cash. Open a current account for teenagers and guide them through using online banking and digital payment methods responsibly. Experiencing new payment technologies first-hand develops digital literacy.
Talking About Support
Financial struggles can happen to anyone. It’s valuable to teach children that there are sources of support available if people cannot afford life’s necessities. In the UK, foster carers receive a fostering allowance to help them pay for expenses when fostering UK vulnerable children. Food banks provide free parcels to people facing food poverty. Charities like Turn2Us and EntitledTo help people check their eligibility and apply for welfare benefits, grants and tax credits. Local authorities have a duty to assist families at risk of homelessness. Teaching children about support networks demonstrates compassion and civic responsibility from an early age.
Responsible Borrowing
As children become teenagers, it’s time to discuss responsible borrowing. Explain good and bad reasons to take out credit or loans, like paying for education versus excessive lifestyle spending. Teach older teenagers about interest rates, credit scores, and how to pay bills on time before they start handling their own credit cards and bank accounts. Discuss student loans and mortgages as major financial decisions requiring research and planning. Understanding credit as a useful tool that builds financial reputation, rather than “free money”, sets the groundwork for responsible borrowing later in life.
Equipping children with a well-rounded financial education prepares them to navigate our complex monetary systems with confidence. From exchanging physical coins to responsible digital banking, engage children through practical, hands-on learning.