An Early Introduction to Money

Money is a fantastic mathematical topic. It is practical, useful to a child's 'real-world' and has links to so many other areas of maths. It can be a difficult topic for a child to fully grasp and will require time and patience, but there are so many fun, engaging and easy to prepare methods to help a child understand money. This post explains how money can link in to other early mathematical topics and provides ideas for tasks that help children really understand money and solve money problems.

(To see a full list of available posts click here.)

Develop an awareness of money

It is important for children to have some mindfulness of money - how it is used, what it is used for and the relative value of different things. We want them to truly grasp the concept of money and (later in life) be sensible with money - so let's give them a basic awareness at a young age. The following are ideas that parents can regularly do at home with their children, but they can also be adapted to reward systems at school (if they are receiving stickers, or marbles in a jar as rewards, they are still learning about the concepts of saving, earning, value and exchange of goods).
  • Talk to children about what you are buying in shops - when grocery shopping, explain why you chose one item over another (it is cheaper). Once the child has developed a better awareness, ask them which one you should buy and why. Playing 'shop' can be a fantastic way to increase understanding, as you can ask the child to price up the items with what they think the relative values should be.
  • Pocket money - give children a regular amount of pocket money and encourage them to save for what they want (they may find it difficult to start with, as children tend to live for the now!). If they want more than one thing (a toy, some sweets, a go on the ride) compare the cost of the different items and talk about how long it would take to save for each one and whether it is worth it. I have found it to be a very successful strategy for discouraging my child from wasting his money (you could go on the merry-go-round, but then it will take you an extra week to save for that toy you wanted...).
  • Allow children to earn - pay them to do certain chores. This enhances their awareness that money has to be earned (it isn't something that people just have) and helps them later comprehend income vs expenditure. If they are saving for something it also helps them to realise that the more they earn, the quicker they will save. It is, however, important not to pay a child for every chore he does, otherwise he might start to think that he should only help someone if he is being paid. Explain that non-monetary rewards for chores (such as extra time to play, or just making someone feel happy) can have a 'value' too.
  • Talk about where money comes from (i.e. employment) - this links in to the previous point, but it is very important to understand that money has value because it doesn't just 'grow on trees' and it is why we go to work.
  • Discuss the rest of the world - it is good for children to have awareness of other people and other cultures. Discuss with them how not everyone has money and some people have lots and how different countries have different currencies that are worth different amounts. Later on, different currencies are also great for learning about ratio and proportion and can be used for practising multiplying and dividing in a practical context.

Learn to identify different coins

If you give a young child a choice between a 5p, 2p or £1 coin, they will often choose the 2p, due to its size. This is due to a lack of awareness of the different values of the coins. There are many ways to help children identify the value of different coins and it can be a lot of fun. It is important to start with coins that are less than £1 in value, otherwise we are expecting children to grasp the difference between 1p and £1 and understand that 50p is actually worth less than £1. Clearly they will need to grasp this eventually, but starting simple and building up to this leads to a smoother and more fun learning process.

Sort and order coins up to £1
Start by giving a child a set of coins (1p, 2p, 5p, 10p, 20p, 50p and £1) and ask them to put them into different groups. They may decide to group them according to their shape, but keep encouraging them to think of different grouping systems until they group them according to colour/material. This can lead to an interesting discussion about the different colours (copper, silver and gold) and how silver has a higher value than copper. Of course, none of the coins are actually made of gold or silver but naming the colour of the coins helps to emphasise the different values. If the child has learnt anything about the Olympics or medals, you can compare this to gold, silver and bronze medals. Through discussion, the child will realise that a silver coin is worth more and so a person would rather have a silver coin than a copper coin, even if it is smaller. This helps the child start to develop an awareness of 'value' and how the relative size is not always the most important feature. 

Now ask the child to order the coins from smallest value to largest value (or from the coin that they would least like to have to the coin that they would most like to have). They will hopefully order the copper coins first (from smallest to largest) and then follow with the silver coins and finally the £1 coin. This will produce a set of coins that are almost in order from smallest to largest value. Now you can look at and compare the numbers on each coin and discuss that the 10p and 20p need to be swapped, as 20p has a higher value than 10p, even though it is smaller - you could then even discuss the different shapes of the coins. This activity gives the child a practical and memorable experience of thinking about the relative value of the coins and will help them to realise that it is the number on the coin that matters and not the size.

Coin matching game
Draw around the edge of a few different coins and then ask the child to guess which image matches the coin. You can ask them to fill in the number that each shape represents and discuss the colour and value of each coin in turn. This will help children to become more familiar and be able to automatically recall the value of each coin (it also helps them practise their shapes as you can talk about how you know which one matches, discussing the number of edges and the relative sizes).

Learn the value of different coins

Make up different amounts using small coins 
This task helps children to learn the relative value of small coins. Simply ask children to use 1p coins to make up the value of other coins up to 20p. As well as learning about money, this task helps students to develop their awareness of the magnitude of different numbers and helps them to visualise the relative sizes.  You can then extend the children on to using 2p coins or 5p coins to make up the different values, which also links in to counting in 2s and 5s and helps children to practise and understand the 2 and 5 times tables. When the children have developed their understanding. you can move onto making up larger values of money.

Use a world map to represent the relative GDP per capita of each continent
Print off a world map that outlines the continents. In each continent, label the relative average GDP per capita of each continent. Below is a table of current data (Feb 2017 taken from Wikipedia). We decided to represent each thousand using a 1p coin so North America was labelled 37p. Ask the children to put the relevant amount of money in each continent using 1p coins. This will help children become aware of the relative wealth of different continents and will help enhance their cultural awareness. After they have filled up the continents, give them coins of other denominations and ask them to make the correct amounts using as few coins as possible. Doing this will help increase their awareness of the different values of each of the coins.

You could also extend this on to using £1 to represent the GDP per capita of Europe and converting the other continents to match (older children could do the conversions themselves to practise ratio and proportion). This will give children a better idea of the relative wealth and which continents are richer/poorer than Europe.

GDP per
capita (US$)
World Average
North America
South America

To swap or not to swap?
Play a game where there are two piles of money, and ask the child if they want to swap the pile in front of them with the pile in front of you (or someone else). This will encourage them to count and sum the value of the coins and will help them to realise that more coins doesn't necessarily mean more money.

Problem solving

Investigate how many ways you can make a given amount
Give children a large pile of small denomination coins and ask them to make up a certain amount of money. By finding as many different ways as they can to make different values, children will soon start to develop their own ideas of which coins are easier to use and why - they will realise that it is easier to use a 10p and a 1p to make up 11p, rather than have to count out 11 pennies. Not only does this practise counting and addition skills. it will also enhance their understanding of the relative values of the coins.

If you only give the students the option to use 1p, 10p and £1 coins, you can link this into their knowledge of place value by using column headers. This really demonstrates to a child that a one (pound coin) in the pound column represents 100 (pennies) in the pennies column. When you later extend the children into writing money using a decimal point, linking back to this task can really enhance their understanding of decimal numbers. Tasks such as this also help to develop a child's investigative skills, as it encourages them to think about working systematically and recording their results. You could always add an extra element of fun by making it into a competition of who can find the most number of different ways...

Which coins make the correct amount
There are plenty of worksheets and games available that encourage children to use the correct coins to make a given amount. Start with simple values, where children are only required to use one coin. This will get them used to preempting which coin to use and will help them remember the different values available. You can then move on to items that require more than one coin (such as something costing 7p). Worksheets are useful for getting children to record their answers, either by drawing the coins or writing the values, but games such as shopkeeper are much more practical and very engaging. You can set the shopkeeper the task of checking the money and the shopper the task of buying the item using the correct change only. This way, both children are learning, and they are helping each other.

Match equivalent values

Ask children to look at pictures or piles of coins and match the piles that have equivalent values. For example, a pile of three 1p coins and a pile of one 1p and one 2p would be a matching pair. This can be made into a fun, competitive game (such as pairs) or into a worksheet or matching task. Not only is this fun, it also reinforces the idea that you can make certain amounts in a variety of ways. It will help children to become more familiar with the relative values of coins and aids their memory and instant recall of the different coins available.

Work out how much change

A simple game or worksheet that requires a child to work out how much change they would get has so much potential for linking money to other areas of maths. The process will help improve a child's problem solving skills and it is a very practical, easy to understand mathematical concept. For children who struggle, allow them to use coins to help them work out their answer and encourage them to record what they are doing, by either using pictures or money number lines. Eventually, they will be able to solve the problems without having to have physical coins to help them. Solving change problems requires children to count, add, subtract and even multiply (if you buy more than one item).

Links to other areas of maths

Money is one of those few mathematical topics that is straight away obvious as to why we need to learn it. I have never once had a student ask me "why do I need to learn about this, I will never use it outside of this classroom?" - a question that I have sadly had from students of all levels and about most mathematical topics. In fact, I can't think of any other topic that one student or another hasn't queried in this way. Students can 'see the point' of learning about money. They see it every day and are aware (to some extent) that they need money to buy what they want. As a result, children are immediately engaged and keen to learn - the trick is to keep them enthusiastic whilst teaching them what they need to know. There is also a great opportunity here, to use this enthusiasm to enhance their ability and knowledge in other areas of maths. Money can be linked to many other areas, such as:

  • Counting - counting money can help children to practise counting abstract (non-physical) quantities (e.g if they have a 2p, they need to count on 2 more, even though they only have one object). Although it is important for children to understand numerals as representing a physical quantity, they will eventually need to be able to apply numbers to non-concrete situations.
  • Counting in 2s, 5s and 10s - 2p, 5p and 10p coins can be used to practise counting in these sequences that children are expected to know. It also offers the opportunity to link this into the 2, 5 and 10 times tables (how many 10p coins did you need to get up to 50? etc.).
  • Recognising and ordering numbers - using monetary values is a good way for children to really think about the relative size of numbers and decide which is bigger. This can be particularly challenging (as 2p coins are larger than 20p coins) but means that children will have to think about the value of the coins and therefore the numbers rather than just ordering by coin size.
  • Place value - as well as ordering coins from smallest to largest value, if you use only 1p. 10p, £1 and £10 denominations, this can easily be linked to our decimal number system.
  • Decimals - using money is a practical way for children to really get a feel for the value of a number after the decimal point (they know that they need 100 pennies to make a pound). However, care needs to be taken to not embed any misconceptions, such as that decimals always require two numbers after the decimal point.
  • Number bonds - it is easy to find ways of practising number bonds to 5, 10, 20 or 100 using coins (due to the common denominations). Using 10p coins to make up a pound is particularly useful for making the link between number bonds to 10 and number bonds to 100.
  • Adding and subtracting - money offers a practical and kineasthetic way of practising adding and subtracting and helps to reinforce how addition and subtraction are linked. Questions such as "how much more do you need?", "how much change will you get?", "how much money do you have altogether?" emphasise the language used with addition and subtraction.
  • Multiplying and dividing - asking a child to work out how much a number of the same items (e.g. 4x sweets) would cost is helping them to practise and understand the process of multiplication. Asking the children to share out money equally between people or to work out how much each item costs if they bought more than one encourages them to practise sharing and dividing in a practical context. 
  • Simple algebra - It is also possible to use money problem tasks as an early introduction to the use of simple algebra. Asking questions such as '3 apples cost 12p, how much does each apple cost?' encourages children to understand that the cost of an apple is initially an unknown quantity. They can represent the problem as a simple sentence by saying "3 apples equal 12". This is a practical way to introduce the idea of using the letter 'a' to represent the unknown value to make it easier to write (3a = 12). Although this does not cover the difference between constants and variables, or many other important areas of algebra, it should start to get kids used to the ideas of using letters in maths in a useful, understandable way (something many children are adverse to).
  • Shape - when learning to recognise the value of different coins, children will be considering the relative size and thickness of the coins, as well as whether or not they are circles.
  • Problem solving - an important part of the numeracy strategy is to be able to solve 'real-life' problems and apply problems solving techniques. Money offers endless opportunities and is more intuitive for children than many other problem solving tasks.

As well as linking to many other areas of maths, money is important for children to learn in its own right. Fortunately (since 2014) financial education is taught as a compulsory part of the National Curriculum from KS3 onward and there has also recently been an increased emphasis on solving problems relating to money within the maths curriculum. Teaching children about value and how to budget and the relative cost of things is vitally important for their future. Helping them to develop an awareness of money and understand the relative value of coins at a young age can lead to a smoother transition into understanding these more complicated concepts in the future and will help them with their financial education in secondary school.


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