Pocket money power: introducing children to coins and notes

In the age of contactless payments and online transactions, it might seem pointless to teach children about physical money. But there is so much they can learn from handling and exchanging coins and notes…

I’ve been writing about the educational development of my granddaughter Daisy for several years now. But there’s been a gap in my blogs – a topic I’ve avoided writing about. Money. 

In recent years we’ve all become more accustomed to making cashless payments for even the smallest amounts.

The pandemic only seemed to deepen this trend. Thanks to those changes and several UK lockdowns, Daisy saw her parents, grandparents and childminder using cash infrequently. 

But with the arrival of the Tooth Fairy, pocket money, and Christmas cash from relatives, Daisy is now being exposed to money in its physical form as coins and notes. 

Cash for cones

To help Daisy understand the value of coins and banknotes, we began to organise the occasional shopping trip centred around her purchasing choices.

We began with a small outing. Together we went to an ice cream stand where Daisy selected her preferred flavour (bubblegum, as usual). Then she handed over the coin that we had given her, and received her a single-scoop cone in return. 

Daisy was happy to repeat this exchange on several visits. Fortunately the ice cream stand is cash only!

We didn’t talk about the actual value of the coin Daisy had used. The intention was to show Daisy that we use coins, not just contactless payments, to make purchases!

Focus on the folding stuff

The next shopping experience happened after Daisy was given a bank note gift from her other Nanny. 

Daisy’s parents explained to her that this was also money, it was called a £5 note. The next time that we all went shopping, Daisy could spend her money. She decided that she would like to go to a toy shop. 

With some guidance, this was an opportunity for Daisy to have a certain amount of money and have the experience of making her own selection and buying something herself.

Before we went shopping, Daisy had decided that she would like to buy some Lego. 

A toy shop is full of so much temptation and Lego sets come in all sizes and prices. We found that the best way to support Daisy’s buying was to show her the number 5 on the shop display label and direct her to the Lego sets that were just £5. 

I had wondered if she might be upset by having a limited choice. Instead, Daisy seemed to relish the opportunity to choose something for herself!

Pocket money pride

She carefully examined the boxes of Lego in her price range, considered all the options, then happily made her choice. 

She asked for her £5 note in her purse and knew that she had to go and make her purchase at the till. She exchanged her £5 note for the Lego set.

These two early stages in understanding the concept of money introduced Daisy to some of the vocabulary of money. This was her chance to handle money and make a purchase. She had an opportunity to make a choice about how she would like to spend money, and then she could experience the exchange of money for goods.

Of course, this is just the beginning. The next stage in familiarising Daisy with money will be to introduce her to each of the coins we use, their individual numerical values, the concept of receiving ‘change’ and even the idea of online purchases.

Daisy is now beginning to receive weekly pocket money to support her understanding of saving and spending.

These are subjects I look forward to exploring in a later blog.

Granny Smith says…

Children will have the opportunity to roleplay with play money in early years settings and begin to understand the process of exchanging money for goods. 

Being able to handle real coins and enjoy first-hand experiences of the exchange of money for goods will help a child begin to understand the value of money. So involve them, let them hold and hand over the coins when you are paying for your shopping.