How do I help my child develop good online money habits?

Internet Matters expert panel share their thoughts about how to help children think more critically about how to manage money online.

Dr Elizabeth Milovidov, JD

Law Professor and Digital Parenting Expert
Expert Website

Today, it is easy and almost seamless for children to spend money online.  Regardless of the focus: video games (in-app purchases, gaming accessories), or influencers (gifting, patronage) or on gambling-like games (loot boxes, player packs) children may be in over their heads and susceptible to fraud, scams or other financial harms.

With these trends in online spending, it is more important than ever to help children and young people understand financial literacy. The significance of earning, saving and spending money, will support proper money management skills later in life and will ensure that children understand the value of money in a virtual world / growing cashless society.

Quick tips to recognise potential risks (i.e., fraud/scams)

  • Purchase from trusted sources
  • Refuse request from unknown contacts or payment requests in an unusual manner
  • Check for typographical errors and mistakes
  • Be suspicious of stories trying to trick you into clicking a link or opening an attachment

Quick tips to keep children/young people’s financial information safe

  • Use a password manager
  • Enable two-factor or multi-factor authentication
  • Keep devices protected by installing and updating antivirus software

Quick tips to support (and track) in-game and online spending

  • Create an agreement regarding permissions and amounts spent on games
  • Use parental controls to guide spending
  • Use pre-paid value cards
  • Understand what is happening with respect to children and online gambling


Karl Hopwood

Independent online safety expert
Expert Website

The last 12 months have seen huge rises in online purchases with sales of household goods rising by 83.5% in 2020 and non-food goods by 77.6%. Our children can be encouraged to make online purchases in apps and games that they use and it can sometimes be difficult to resist with in-game purchases offering them a quicker way to unlock more levels even though the game itself might have been free.

As parents, we should familiarise ourselves with the games and the apps that our children are using – most will have controls and settings which will prevent any unwanted spending and we need to take the time to find out about and use these.

In addition, some advice around scams and how to spot them as well as some key messages around not sharing card details is important. Make sure that your credit or debit card isn’t synced up to your child’s account. It is very easy for them to click and not realise that it is costing “real” money. If something does go wrong encourage them to come and speak to you so that you can sort it out together.

A great way to keep a check on online purchases is by providing your child with a pre-paid card where you can give them a weekly or monthly limit that they can manage and spend themselves. This will help them to budget and to learn the value of money.


Sarah Smith

Breck Foundation Speaker
Expert Website

Helping children safely navigate the choppy waters of online finances is crucial. From pocket money lost on fake Fifa coin sites (which happened to my son years ago) to accidentally racking up the charges in smartphone games, there are many ways children (and by implication, parents!) can come financially unstuck.

One current hot potato is in-game spending – that is, actively spending money on purchases within a game that you already own. This includes Loot Boxes, card packs, prize wheels and more. It can be hugely tempting for children because it lets you advance in a game or unlock features quickly, but obviously, without any controls, it is a disaster waiting to happen.

Recent research in the annual GameTrack Survey shows that just over a third of children who game are allowed to spend money on in-game purchases. The PEGI rating on games themselves now has to disclose whether in-game purchases are part of the game, so as a parent you can see clearly whether this may be an issue when you are considering what games to let your child play.

If you are happy to link a bank card to your child’s game you need to have an agreement in place with them to make sure that they are clear what their limits are. Parental controls on consoles can also limit spending, or you can use a pre-paid card that will only allow a player to spend what is on the card rather than going into debt. Make sure the child knows this is real money, not virtual!

Secondly, talk to your child about any pressures they feel about ‘keeping up with friends’ by spending money in-game. The 2019 report ‘Gaming the System’ by the Children’s Commissioner Anne Longfield revealed that in some cases children were spending hundreds of pounds without any real idea of what the rewards would be (this is very much the case with loot boxes, a common feature in popular games) but in the hope that they would be able to keep up with their friends in the game. This ‘keeping up with the Joneses’ can be tough, but it’s important to remember that there are still plenty of games that offer interactive, entertaining experiences without pestering players for in-game purchases. You can find a whole selection of them in the Family Video Games Database here.

There are so many other aspects to good money sense online for children, including spotting when things may be fake or scams – do remember to point out to your children that when it seems too good to be true, it probably is! Third-party websites offering deals on coins, points and other gear are often scams. Once a child has been scammed or tricked out of pocket money for ‘trades’ or ‘deals’ (and it does happen a lot; the children I talk to when I present in schools are always very keen to talk about their experiences with this) they are generally warier, having learnt the hard way. But how much better would it be to educate our children properly about both digital resilience and being a good digital citizen so that they don’t end up in these situations in the first place? This is something the Breck Foundation actively campaigns for – educating children to be able to stay smart and safe online, and for a future internet where all children can play and learn safely.

Dr. Linda Papadopoulos

Psychologist, Author, Broadcaster and Internet Matters Ambassador
Expert Website

Like most things with kids, modelling appropriate behaviour is a great way to sensitise them to important issues and this is true of being fiscally responsible online.

Try speaking to them about how much easier it is to get carried away when shopping online and explain the techniques that you use to hold yourself to account, like sticking to a weekly budget or giving yourself a 24 hour cooling off period when you see something that you want so that you don’t act on impulse but really think things through. Even doing your research to find the best deal you can online will reinforce the idea that it’s important to take time and value your money, thinking through purchases rather than buying impulsively.

It’s also important to speak to them about keeping track of their finances. Setting up a kids saver account where they develop good habits around saving but also around keeping track of finances, knowing how much they spend and being accountable for their spending is a great way to have important conversations about important issues like recognising scams vs. genuine digital correspondence from banks and generally around keeping track of what comes in and out of their account and being financially responsible.

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