4 money lessons to boost your children and grandchildren’s financial independence

Introducing children to money matters from a young age could help them build the financial independence they need to achieve their goals as they get older.

Yet, a survey by the Money & Pensions Service has revealed that 3 in 4 UK teachers believe that most young people leave education without the financial skills they need.

So, as a parent or grandparent, you could play a key role in teaching the young people in your family how to manage their money responsibly.

My Money Week, which runs from 9 to 13 June, aims to get young people aged 3 – 19 excited and interested in financial matters.

So, it’s the perfect time to build your child or grandchild’s financial knowledge. Here are four important money lessons to get you started.

1. Understanding where money comes from and recognising its value

Learning the value of money and where it comes from is an important stepping stone for gaining more advanced financial knowledge and skills.

Children as young as three or four years old can learn to recognise the value of different coins and notes, hand over money in shops, and start using a piggy bank.

As they get older, one of the most fundamental money lessons to teach your children or grandchildren is that money isn’t an unlimited resource that is magically dispensed from cash machines or accessed from their phones.

With the rise of high-earning influencers and a growing societal focus on building wealth through passive income, children might not appreciate the connection between work and reward.

You can demonstrate this link by giving them opportunities to earn money, such as by doing chores around the house or encouraging them to find a weekend job once they’re old enough.

2. Setting and sticking to a realistic budget

Once your child or grandchild appreciates that money is usually earned by work or effort and that everyone must live within their means – no matter what their financial situation is – you can teach them how to budget.

From around the age of seven or eight, most children can grasp the difference between “needs” and “wants”. They might want those sweets or a new toy, but they need shelter and clothes.

Try giving them envelopes or jars that they can decorate and mark as “needs” and “wants”. Then, ask them to divide their pocket money as they see fit. This is a great way to foster financial independence and responsibility.

Older children might enjoy using budgeting apps or getting involved with managing the finances for a family occasion or holiday.

Encourage your children and grandchildren to set short- and long-term goals, possibly with mini-milestones along the way. Knowing that there is a reward not far ahead could help keep them motivated to stick to their budget.

3. Avoiding expensive or unnecessary debt

According to data published by the debt charity StepChange, the average unsecured debt amount for each individual who sought their help rose from £14,654 in 2023 to £15,672 in 2024. This equates to a £1,018 (7%) increase.

High levels of debt can have wide-ranging effects on a person’s life, such as:

• Diminishing mental health and wellbeing
• Restricting life choices in both the short and long term
• Increasing the risk of defaulting on loans or needing to take on more debt.

Of course, borrowing money is sometimes a necessary part of life. For example, young people might need to take out a mortgage to buy their first home.

That’s why it’s crucial to teach your children and grandchildren:

• How credit works – It’s not “free money” as the loan will usually need to be repaid, and there is likely to be interest added on top.
• The different types of credit available – Such as credit cards, mortgages, and student loans.
• How to tell the difference between “good” and “bad” debt – Looking at factors such as the interest rate and the effect on their credit score (positive or negative).

Learning how to use borrowing sensibly could help young people make informed financial decisions.

4. Staying safe when managing finances online

Figures released by Finder reveal that in 2025, 87% of UK adults use some form of online or remote banking.

While digital platforms can make managing money extremely convenient and efficient, individuals who aren’t vigilant could be vulnerable to financial fraud and scams.

The Financial Ombudsman Service reported that fraud and scam complaints hit their highest level between April and June 2024. More than 8,700 cases were filed and over half of those related to online bank transfers.

So, teaching your children and grandchildren how to keep their money safe online is vital. You could do this by:

• Sharing real-life examples of financial scams and highlighting the red flags to look for
• Emphasising the importance of not sharing passwords, PINs, or bank details
• Explaining the risks of sharing personal information on social media
• Encouraging them to regularly monitor their accounts and transactions
• Fostering open communication about money and financial concerns.

Get in touch

If you’d like to find out how we can work with you and your family to support all your financial planning needs, we’d love to hear from you.

Please email hello@bluewealth.co.uk or call us on 0117 332 0230.

Please note

The content of this newsletter is offered only for general informational and educational purposes. It is not offered as, and does not constitute, financial advice.

Blue Wealth Ltd is not responsible for the accuracy of the information contained within linked sites.

Blue Wealth Ltd is an appointed representative of Best Practice IFA Group Ltd, which is authorised and regulated by the Financial Conduct Authority.

Your home may be repossessed if you do not keep up repayments on a mortgage or other loans secured on it.

Approved by Best Practice IFA Group: 20/05/25