Home schooling: tips to add financial education alongside the Three Rs

Our financially-savvy experts share some advice for kids at Key Stage One and beyond.

With millions of schoolchildren across the UK stuck at home amid the Covid-19 pandemic, next week marks an end to the Easter holidays as parents return to the tricky task of having to manage their children’s education with their own work responsibilities.

With talk of the financial impact of coronavirus high up the news and political agenda, the financial fall out of this pandemic will not be lost even on the most fortunate children. In the last annual London Institute of Banking and Finance Young Persons’ Money Index in November 2019, 69% said they worry about money and 82% of students said they want more financial education in school.

Money can be a taboo subject even at the best of times: in the interactive investor’s Great British Retirement Survey of 10,000 consumers last year, almost a third (32%) of those in a relationship only talk about money with their partner once a month - or less.

Myron Jobson, Personal Finance Campaigner, interactive investor, says:

“In a packed curriculum, financial education competes for space with many other topics and it is not compulsory in academies, private schools or faith schools. But with many families now taking a much more hands-on role in home learning, there’s more flexibility to talk about money management. Sadly, it isn’t just adults who worry about money, and learning about budgeting and the value of money can help foster a healthy relationship with money in the future.”

Money talks – interactive investor tips on teaching children about money

Gamify money lessons – all ages

Myron Jobson says: “Finances don’t have to be dull, and you can use games to engage children with money issues. Monopoly teaches children a variety of financial lessons while having fun. It teaches about the pros and cons of sitting on cash and the importance of investing to build long term wealth as well as the benefits of portfolio diversification. It is also a good introduction to mortgages. It is a great game to discuss the cost of things and learn about the value of money.

“For younger children, you can make up your own role-playing games, like playing shop to help them understand how money is used day to day as well as introducing the concept of budgeting. Counting money is also a good starting point to help young children understand the value of money – so that they know it doesn’t grow on trees and improve their maths skills.”

Counting the pennies – from key stage 1 and beyond

Moira O’Neill, Head of Personal Finance, interactive investor says: “Money is one of the most effective visual learning aids out there. Anyone with children in key stage one will be familiar with ‘tens and ones’ in the maths curriculum. Young children often struggle with ‘ten more, ten less’, and using loose change as a visual aid is the best illustration there is. Take a 10 pence piece away, or put more down, is a great prop to help the penny drop. Counting money, and ordering money, is a great introduction to times tables and all sorts of maths concepts too. 

“For slightly older kids, if you want to teach them about tax, then that’s easy too – give then their pocket money, and then have them work out how much you would take off them if they were a basic rate tax payer and you were the Government. There’s no better way to learn the value of money – the hard way!”

Books and wizarding tricks

Moira O’Neill says: “Fiction titles that can provide fun ways to teach kids about money and investing. It may not be obvious in the first read, but Harry Potter and The Philosopher’s Stone by JK Rowling offers some interesting financial lessons. It has been estimated that by one Potterhead that the 11-year-old boy wizard inherits a whopping £870,000 from his family. But will it be enough to sustain him for a lifetime? And was Vault 713 the best place to put the money, or should it have been invested? 

“For younger children, Jack and the Beanstalk offer some value financial lessons. It’s a great cautionary tale about scams – if something looks too good to be true, it usually is. Except this is complicated by the fact that those beans really are magic. Still, this is a great conversation starter about risk and reward, and Jack has to take great risks to get his fortune – selling the families only resource for a few magic beans is as high stakes as it gets.” 

Pocket Money

Myron Jobson says: “Here’s a pocket money lesson that is an oldie but a goodie. The idea is to teach children that pennies make pounds and the concept of delayed gratification. It takes less time to save up for a treat like a chocolate bar, but longer to save up for something bigger like a video game. How much pocket money to give is not the point. What matters is that the child is able to practice money management with their own cash

“In addition, a good way of teaching children that money doesn’t grow on trees but needs to be earned is to provide opportunities for them to earn money by doing household chores such as hoovering or mowing the lawn. It also helps to instil good work ethic from a young age which will bode well for them when they are in full-time employment in adulthood.” 

Older kids

Junior ISA

Rebecca O’Keeffe, Head of Investment, interactive investor says: “One of the more practical ways of teaching your child about money management and investing is to do it. Junior ISAs can be a great way to engage children with finances as the savings will ultimately be handed to them once they turn 18. While, as guardians, you’re the one that may need to do the investing, involving your child in the process can help engage your child’s interest. Buying Facebook if your child is hooked on Instagram or Ferrari if they are a bit of a gearhead could help align your child’s interest with investments which could be the best way of getting them into a lifelong investment habit.

“At age 16, children can choose to take control of the account from their parents or guardians and they will require some guidance. You can help them sift through the expansive investment universe to select propositions that might be right for their circumstances, while teaching the importance of not putting all their eggs into one basket.”

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