How to Teach Your Kids About Money

January 31, 2023

Let’s be honest, talking about money with kids isn’t always comfortable. But it's arguably one of the most important conversations you can have to set them up for a secure and confident future. Waiting until they’re adults to start teaching about finances is like waiting to teach someone to drive – they’ll be in a much tougher spot.

So, where do you even begin? It’s fantastic that you're considering this now. Here's a breakdown of how to introduce your children to the world of money, broken down by age group:

Preschoolers (Ages 3-5): Understanding Value

At this age, it’s less about complex budgeting and more about understanding the concept of value.

Play Money: Introduce play money. Let them "buy" toys with it, giving them a tangible understanding of exchange.
Needs vs. Wants: Start simple! “We need groceries for dinner, but we want that sparkly toy.” This is a great starting point for distinguishing between essential and desirable items.
Piggy Bank: Give them a clear piggy bank and encourage them to save coins.

Elementary School (Ages 6-11): Introduce Basic Budgeting

Now you can start introducing the idea of earning and spending.

Allowance (Optional): Consider giving an allowance – even a small amount – tied to simple chores. This teaches them that money comes from effort.
The Three Jars: A classic – Savings, Spending, and Sharing. Help them divide their money into these categories.
Shopping Trips: Take them grocery shopping and let them help choose items within a set budget.

Middle School (Ages 12-14): Deeper Dive into Budgeting & Saving

As they get older, they can learn about more complex financial concepts.

Bank Account: Open a savings account together and explain how interest works (even a small amount).
Setting Goals: Help them set financial goals – saving for a specific item or experience.
Tracking Spending: Encourage them to track their spending (even if it’s just on a notebook).

High School (Ages 15-18): Responsibility & Real-World Finance

This is a crucial stage for developing independent financial habits.

Part-Time Jobs: Encourage them to get a part-time job – this teaches them about earning, taxes, and financial responsibility.
Credit Cards (with caution): If appropriate and with close supervision, consider a secured credit card to build credit responsibly. However, this is a serious topic and requires careful guidance.
Discuss Larger Purchases: Talk about saving for bigger items like a car or college.

Key Takeaway: Consistency is key. Start early, keep it age-appropriate, and make it a regular conversation. The goal isn’t to make them perfect savers, but to equip them with the knowledge and habits they need to make informed financial decisions throughout their lives.