Most of us were never taught about money. We picked it up along the way, often through mistakes. Many parents want something better for their children but aren’t sure where to start, or what’s realistic at each age.
This guide sets out what children can typically understand about money from age 7 to 11, with one simple activity for each age that you can try at home this week. It follows the same order as the ten lessons in the Smartmonies course, because each idea builds on the one before. Every child is different, so treat these milestones as a guide, not a test.
Money milestones at a glance
| Age | School year | Key milestone | Try this at home |
|---|---|---|---|
| 7 | Year 2–3 | Knows money is exchanged for things and can tell needs from wants | The “need or want?” shopping game |
| 8 | Year 3–4 | Understands that things have a value and that money is earned | Compare prices for the same item |
| 9 | Year 4–5 | Can save towards a goal and understands that savings can grow | A savings jar with a picture of the goal |
| 10 | Year 5–6 | Can keep a simple record of money in and out, and knows what tax is | A one-month money diary |
| 11 | Year 6–7 | Understands that borrowing costs money and what it takes to run a home | Plan a week’s family food shop |
These are typical milestones for children who have had the chance to learn about money. A child who is “behind” can catch up quickly once the conversations start.
Why start at 7?
Research by the University of Cambridge for the Money Advice Service found that many of children’s core money habits are already forming by around age 7. That’s when children start to understand that money is limited, that choices have consequences, and that waiting can be worth it.
It’s also the age when money becomes harder to see. Children watch parents tap a card or phone, and money can start to seem limitless. Around 7 is the ideal time to make it visible again — our piece on invisible money looks at this in more detail.
Schools are catching up. In England, primary pupils currently meet money mainly through maths, but following the government’s Curriculum and Assessment Review, financial education is becoming compulsory in primary schools as part of citizenship, with first teaching planned from September 2028. Until then, much of what children learn about money between 7 and 11 happens at home.
Age 7: money is a tool, and not everything is a need
At 7, children are ready to learn that money is something we exchange for things we need or want, and that the amount we have is limited. They can start to understand the different forms money takes — coins, notes, cards, phones — and that a card payment still uses real money from a bank account.
This is also the age to introduce the difference between needs (food, a home, clothes, getting to school) and wants (sweets, toys, a new game). It sounds simple, but it’s one of the most important money skills anyone learns, and many adults still find it hard in a shop.
Signs they’re getting it
They ask “how much is it?” before asking for something, understand that paying by card isn’t free, and can sort a list into needs and wants — even if they argue about some of them.
Try this: the “need or want?” game
Next time you shop together, give your child five items from the list to sort into “need” or “want.” Is a new winter coat a need if last year’s still fits? There’s no single right answer. The point is the conversation.
Words to use: money, coins, notes, card, bank, need, want, choose, spend. Matches Lesson 1: What is Money? and Lesson 2: Needs & Wants.
Age 8: things have a value, and money has to be earned
At 8, children can start comparing value, not just price. They can understand that two similar things can cost different amounts, and that “worth it” depends on how much you’ll use something, how long it lasts, and what else you could have bought instead.
This is also a good age to connect money with work. Children often think money comes from cash machines or “from the bank.” Explaining that adults earn money by working, and are paid for their time and skills, helps them see why money is limited and why spending decisions matter.
Signs they’re getting it
They notice when something is cheaper in another shop, ask whether something is “worth it,” and understand that parents go to work to earn money for the family.
Try this: the price comparison challenge
Pick something your child likes and find its price in two or three places. Which is the best deal, and why? Then add a twist: is the cheapest always the best? What if the cheaper pens run out in a week?
Words to use: price, value, cost, cheaper, more expensive, worth it, earn, job, wages. Matches Lesson 3: The Value of Money and Lesson 4: Earning Money.
Age 9: saving towards a goal, and why money can grow
By 9, most children can wait for something they want, although it’s still hard. This is the age to build the habit of saving towards a goal. The key skill is delayed gratification: choosing a bigger reward later over a smaller one now.
Children this age can also understand the basic idea of interest: that a bank pays you a little extra for keeping your money there, so savings can grow over time. They don’t need the maths yet. The idea that “money left alone can grow” is enough.
Signs they’re getting it
They can save pocket money for a few weeks without spending it, set themselves a goal (“I’m saving for…”), and are curious about how much they’ll have if they save for longer.
Try this: the picture savings jar
Choose something that costs a few weeks of pocket money, stick a picture of it on a clear jar, and let them watch it fill. To show interest, add 10p for every £1 still in the jar at the end of each month.
Words to use: save, savings, goal, wait, bank account, interest, grow. Matches Lesson 6: Savings & Interest and Lesson 7: Long-Term Savings. See also the Waiting Jar activity.
Age 10: keeping track of money, and where tax goes
At 10, children can keep a simple record of money coming in and going out. This is the basis of budgeting, and it’s a skill that helps enormously in later life. Many adults who struggle with money simply don’t know where it goes each month.
Ten-year-olds can also understand the basic idea of tax: that part of the money people earn goes to the government to pay for things we all share, such as schools, hospitals, roads and parks. Linking tax to things they use every day makes it concrete.
Signs they’re getting it
They know roughly how much money they have without checking, can tell you what they spent last week, and make the link between tax and public services (“so tax pays for my school?”).
Try this: the one-month money diary
Three columns — date, money in, money out. For one month they record everything, including birthday money. At the end, look at it together: where did it go, and would they do anything differently?
Words to use: record, budget, money in, money out, total, tax, government, public services. Matches Lesson 5: Taxes Made Easy and Lesson 9: Keeping a Money Record. See also the Pocket Money Ledger.
Age 11: borrowing, and the real cost of living
By 11, and before starting secondary school, children are ready for two bigger ideas. The first is borrowing: that when you borrow money, you usually have to pay back more than you borrowed, and that borrowing is never free. Understanding this early is one of the best protections against debt problems later on.
The second is the cost of living: what it actually takes to run a home. Rent or mortgage, energy bills, food, council tax, phone and internet add up quickly, and most children have no idea how much a family spends each month. It’s also a good age to talk about online shopping, subscriptions and in-game purchases, which make it easy to spend without noticing.
Signs they’re getting it
They understand why “buy now, pay later” isn’t free money, are surprised when they learn what household bills cost, and start to think before spending in apps and games.
Try this: plan the week’s food shop
Give them a realistic budget for a week’s family food and let them plan meals and a list on a supermarket website. Most children discover food costs more than they expected — and that planning saves money.
Words to use: borrow, loan, pay back, interest, debt, bills, rent, mortgage, cost of living. Matches Lesson 8: Borrowing & Loans and Lesson 10: The Cost of Living. See also the Button Loan and the Household Bill Detective.
If your child seems behind, start at age 7 anyway. These milestones describe what children can understand when they have the chance to learn it, not what every child already knows. Older children move through the early stages quickly, and a few weeks of regular, relaxed money talk can make a big difference.
The role of pocket money
Pocket money is one of the best tools for teaching every milestone in this guide, because it gives children real money to make real decisions with, in a low-risk way. Mistakes made with £3 at age 8 are far cheaper than mistakes made with a first salary at 22. For advice on how much to give at each age, see How Much Pocket Money Should Children Get in the UK? A 2026 Guide by Age.
Frequently asked questions
What age should a child start learning about money?
Around 5 to 7 is a good time to start. Research for the Money Advice Service found that many money habits are forming by around age 7, so early conversations about spending, saving and waiting make a real difference.
What money skills should a 9-year-old have?
By 9, most children can save towards a goal over a few weeks, compare prices, and tell needs from wants. Many are also ready to understand the basic idea of interest.
Is financial education taught in UK primary schools?
In England, primary pupils currently learn about money mainly through maths. Financial education will become compulsory in primary schools as part of citizenship, with first teaching planned from September 2028. Wales, Scotland and Northern Ireland each have their own curricula.
Should pocket money be linked to chores?
Families differ, and both approaches can work. Many settle on a base amount plus paid extras for jobs beyond the everyday — we look at this in Pocket money: how much, how often, and should it be tied to chores?
How do I explain card and phone payments to my child?
Explain that a card or phone simply moves money from your bank account to the shop. The money is still real, and it still runs out. Paying cash for a planned purchase now and then lets children see money physically leave your wallet.
If you would like your child to go further, the Smartmonies course covers all ten of these topics in order for ages 7–11, taught one-to-one by qualified teachers or as an interactive digital course — and the first digital lesson is free. For quick ideas to try at home, browse our free money activities.
Sources: Whitebread, D. and Bingham, S. (2013), Habit Formation and Learning in Young Children, University of Cambridge for the Money Advice Service. Department for Education (November 2025), New curriculum to give young people the skills for life and work.