The Growing Importance of Financial Literacy for Children

Money makes the world go round – and that’s why children need to learn about it as soon as they possibly can. Research indicates that children who receive financial education are more likely to develop positive financial habits, including saving regularly, having a bank account, and confidently managing their money. In England, financial literacy will become a mandatory part of the national curriculum for both primary and secondary schools starting in September 2028.¹

While financial education is becoming more formalized in schools across the UK, experts emphasize the crucial role of parents and guardians in reinforcing these lessons at home. Developing good money habits starts early, with research suggesting they are often formed by the age of seven.¹

Why Early Financial Education Matters

Rajan Lakhani, head of money at the personal finance app Plum, stresses the long-term impact of early financial education: “Teaching kids about the value of money as soon as possible is very important. The habits, attitudes and understanding they develop from a young age can have a big influence on how they approach money matters in adulthood.”¹

Key Concepts to Teach Children About Money

1. Understanding the Value of Money

Young children can grasp the concept of value through play. Setting up a play shop with toys and coins labeled with different values can help them understand basic transactions and the idea that goods and services cost money.¹ With the increasing use of contactless payments, it’s important to reveal children how money works, where it comes from, and that purchases are still drawn from saved funds.

2. Needs vs. Wants

Distinguishing between needs and wants is a fundamental financial skill. Involving children in grocery shopping with a set budget can help them understand essential items versus discretionary purchases.¹ Discussing a list of needs and wants together can further clarify the difference.

3. The Power of Saving

Saving can be made more engaging by connecting it to goals. For example, helping a child understand that saving birthday money can allow them to purchase a desired toy later on teaches delayed gratification and the benefits of saving.¹ Highlighting how small savings accumulate over time can as well be motivating.

4. Earning and Hard Work

Linking pocket money to chores can demonstrate the connection between effort, and reward.¹ This helps children understand that money is earned, not simply given, and reinforces the value of work.

5. Keeping Money Safe

A piggy bank provides a tangible way for children to store and protect their money.¹ As they get older, transitioning to a bank account can further reinforce the importance of financial security.

Resources for Financial Literacy

The U.S. Department of the Treasury’s Financial Literacy and Education Commission (FLEC) plays a vital role in coordinating national efforts to improve financial literacy.¹ The FDIC’s Money Smart for Adults curriculum offers practical knowledge and skills-building opportunities for financial management.² MyMoney.gov serves as a central hub for financial education resources.⁴

On February 3, 2026, the Department of the Treasury published a request for information seeking public feedback on national priority areas and best practices to improve financial literacy. Comments are due April 6, 2026.⁴

Financial literacy is a crucial life skill, and starting early can set children on a path to financial well-being. By incorporating these lessons into everyday life, parents and educators can empower the next generation to make informed financial decisions.