Banking the basics | NatWest

Banking and finance for children

Banking and finance for children

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Banking basic tips

Raising financially savvy children involves helping them to understand everything from budgeting to earning, saving and banking. Not only does teaching children about financial responsibility give them an understanding of the value of money, it also helps to prepare them for life in the real world. Money management is a vital life skill and if kids can develop this from a young age, they’ll be ready for the financial challenges of adult life.

The good news is that teaching your children about banking and money management is probably easier than you think. By introducing the topic while your child is young, you can teach new ideas and build on your child’s financial knowledge as they grow.

Our tips below can help you teach your children about money management:

Open a savings account

Saving for your child can be a great help for their future. Not only does it provide some financial security, but getting kids involved with saving from a young age can go a long way in helping them understand the importance of money management.


One way to do this is by opening up a savings account. These can be opened at any time and are a great place to deposit any additional savings, such as money given to your child as a gift. It’s important to talk kids through their account statements, looking at how much money has gone in and how much interest has been paid. Show your child how their money is growing whilst stressing the importance of saving before spending.

Work to get paid

Teach them that you need to earn money before you can buy things. Show them some household bills and any Direct Debits or standing orders you have set up to pay them. Show them the money coming out of your bank account and tell them what you had to do to earn that money. You could even show them your pay slip. Pocket money could be a good way to help them learn about earning money. Be clear with them how much they’ll get paid and what they need to do to earn that money.

Invisible money

In an increasingly cashless world, it’s important to teach your child about ‘invisible’ money. With the reliance on card payments and online banking, children are now less likely to see physical money such as notes and coins. Without seeing money given in exchange for purchases, it can be harder for kids to understand how much things really cost. It may also lead to children viewing invisible money as an unlimited resource rather than money coming from a bank account.


A good way to teach your child about the reality is to take them to a cash machine and explain where the ‘magic money’ in the wall actually comes from. Visibly show them the money from the machine withdrawal coming out of your account later using online banking. This way, they’ll learn that a bank account is a good way to keep track of your money.


It’s also a good idea to talk about shopping online too, and explain why it can be risky to enter your details online and how to shop safely online.

Set a savings goal

The best way to teach children about saving is to apply the concept to something relevant to them. If they want a new toy or game, you can help them set a savings goal. Introduce the idea of needs (food) versus wants (toys) at the same time as this will help them understand that sometimes you have to save and wait before you can buy something you want. Get your kids to set aside some or all of their pocket money until they’ve reached their goal. This way your child will be able to see their money growing in their account and it’ll help teach them that they should always save a portion of what they earn.

Ideas for teens

A great way to teach teenagers about money management is to let them plan and budget themselves for an activity they really want, like a day out or a birthday party. Teach your teen how to set a budget and get them to work out how much each part will cost. This will help your teenager to see that budgeting makes their money go further.

Talking about credit

It’s a good idea to talk to teenagers about credit before they get to 18 (when they could be offered a credit or store card). Explain when it’s a good idea to use credit, a bad idea to use credit and why it’s better to pay using cash than credit. Explain that using a credit card is borrowing money and like taking out a loan. Ensure that your teenager understands that it’s a good idea to only use credit if they can afford to pay it off each month.

Useful links

Tips for shopping safely online

Money Advice Service

Pocket money advice

Family Lives

These links are to non-NatWest websites. NatWest is not liable for the accuracy of the information provided on these websites. 

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