Tips for Teaching Kids About Money: Age-by-Age Guide

Imagine this: Your 10-year-old asks for a new toy, but instead of just saying yes or no, you decide to turn it into a learning opportunity. You give them a small allowance, teach them how to budget, and explain the concept of saving for future purchases. Suddenly, they're making decisions: “Do I spend it all now, or save for something bigger?”

This is one of the many ways teaching kids about money can be woven into everyday life, helping them understand financial responsibility early on. “When you teach kids how money works, you’re really teaching them about choices, priorities, and responsibility,” says Marissa Moore, a licensed professional counselor, therapist, and mental health consultant at Mentalyc.

Knowing how to teach kids about money—from basic concepts to more complex ideas—is key to raising financially savvy adults. But what’s the right approach? 

In this article, we’ll explore activities to teach kids about money, practical strategies for different age groups, and answer essential questions like, “When should I start talking about money with my child?” 

Why is it important to teach kids about money?

Teaching kids about money goes beyond understanding dollars and cents; it's about building lifelong skills that shape their financial well-being. 

Starting early with basic concepts lays the foundation for them to become financially savvy adults. “Early financial education helps children understand the value of money, develop critical thinking skills about spending and saving, and prepare for future financial responsibilities,” says Mary Zhang, Head of Marketing and Finance at Dgtl Infra, who plays a key role in promoting financial literacy through various initiatives and programs in her company.

Incorporating games to teach kids about money or following an age-by-age guide to teaching kids about money tailors the information to their development, making learning both fun and impactful. “It’s much easier for them to develop smart habits like saving or budgeting when these concepts are introduced early and become part of their routine,” Moore says. 

As they mature, building on this knowledge with more complex ideas prepares them to handle financial challenges as adults. “In our work with financial literacy programs, we've seen that individuals who received early financial education are 30% more likely to have healthy savings habits as adults,” Zhang says.

When should I start talking about money with my child?

What is the best age to teach kids about money? The sooner, the better! Even at a young age, children can grasp basic financial concepts. Imagine your preschooler learning the difference between wants and needs while picking out snacks at the store or dropping coins into a piggy bank and watching their savings grow. These simple, everyday interactions, Moore says, “lay the groundwork for a lifetime of smart money management.”

10 tips for teaching kids about money in everyday life

Some of the best opportunities to impart financial wisdom come from everyday activities. Here are 10 practical tips to help you seamlessly integrate money lessons into your child's daily life.

1. Take them shopping 

“I had a client who taught their kids about money by involving them in grocery shopping—giving them a budget and letting them decide which items to buy,” says Moore. “It’s practical and hands-on.” This approach—which works for kids who know how to count—helps kids understand the value of money, how to compare prices, look for discounts, and stick to a budget. 

Read this next: How to Save Money on Groceries: 10 Tips to Lower Your Bill

2. Use a family budget 

Create a simple family budget and discuss it with your kids. Show them how much money is allocated for different expenses like groceries, entertainment, and savings. This helps them understand the concept of budgeting and financial planning.

3. Give an allowance

Provide a regular allowance and teach your kids to manage it. Encourage them to save a portion, spend wisely, and even set aside money for giving to charity. This gives them hands-on experience with managing their own money.

4. Encourage a summer job 

For older children and teens, a summer job can be an excellent way to learn about earning money, responsibility, and managing income. Younger kids might start hyper-locally, by offering to take in mail or water plants while neighbors are on vacation. A part-time job provides real-world experience that reinforces the connection between work and financial rewards.

5. Set up a savings jar

“Giving kids small responsibilities, like managing their own pocket money or even starting a savings jar, can make learning about money feel more natural,” says Moore. Encourage your children to save a portion of any money they receive, whether from allowances, gifts, or chores. Watching their savings grow can be a powerful and tangible lesson in financial responsibility.

6. Play board games 

Incorporate money-based games like Monopoly or The Game of Life into family game nights to teach financial concepts in a fun and engaging way. These games can spark conversations about money management and financial planning.

7. Discuss needs vs. wants 

Whenever your child asks for something, take the opportunity to discuss the difference between needs and wants. This helps them prioritize spending and make more thoughtful financial decisions.

8. Set financial goals 

Help your kids set savings goals for something they want, like a toy or a game. Work with them to create a plan for reaching that goal, teaching them patience and the value of saving.

9. Model good financial behavior

Kids learn by watching. Demonstrate good financial habits, like saving regularly, budgeting, and avoiding impulse purchases, so your children can see how responsible money management works in real life.

10. Talk about money regularly 

Make financial discussions a regular part of family life. Whether it’s talking about saving for a family vacation or planning a major purchase, involving your kids in these conversations helps normalize money management as an everyday activity.

Age-by-age guide to teaching kids about money: Strategies for every age

What is the best way to teach kids about money? This practice effectively requires a tailored approach that evolves as they grow. Each stage of childhood presents unique opportunities to introduce and build on financial concepts. This guide offers ideas and examples for how to approach these conversations at different ages.

However, remember that every child is unique. As a parent, you know your child best and can adapt these strategies to suit their individual needs and your family’s values. Consider this guide as a helpful starting point, not the only way to teach financial literacy.

Early childhood (ages 3-7)

Focus on basic concepts: 

• Teach the value of money, the difference between wants and needs, and the importance of saving.

Use simple, hands-on activities:

• Introduce a piggy bank to help children grasp the concept of saving.

• Engage in games to teach kids about money, such as pretending to run a store with play money, to make learning fun and memorable.

Incorporate educational apps:

• Use apps like Bankaroo to introduce saving and spending in a digital format, allowing children to track their virtual allowance and see how their savings grow.

Middle childhood (ages 8-12)

Introduce budgeting:

• Provide a small allowance and encourage them to plan their spending.

• Teach them to budget for small purchases, helping them learn about saving and spending wisely.

Teach earning money:

• How do you teach money lessons? Introduce the concept of earning money through chores or small jobs.

• Help them understand the value of work and how it connects to earning and spending.

Incorporate real-life scenarios:

• Use activities that involve practical applications, like planning a grocery list on a budget.

• Focus on building responsibility and understanding the consequences of financial decisions.

Teenage years (ages 13-18)

Introduce advanced concepts: 

• By the teenage years, “teens can begin to understand concepts like compound interest and long-term savings goals,” Zhang says. Introduce how these concepts work, explaining how savings and investments can grow over time.

• Emphasize the importance of starting early and making regular contributions to achieve these goals.

Manage financial tools:

• Guide them through managing a bank account.

• Teach them about understanding credit and the basics of investing.

Set larger financial goals:

• Encourage saving for significant expenses, such as a car or college.

• Introduce budgeting tools like Mint and YNAB (You Need a Budget) to help them manage their finances effectively.

Discuss long-term impacts:

• Talk about the importance of avoiding debt and building good credit.

• Prepare them for financial independence by discussing the long-term consequences of financial decisions.

Challenges in teaching kids about money—and how to overcome them

Teaching kids about money comes with its own set of challenges. Below, you'll find some practical solutions to help you overcome these common obstacles and turn them into opportunities for effective financial education.

Avoiding financial anxiety

One of the biggest concerns parents have is instilling financial anxiety in their children. “The key is to approach money as a neutral topic, rather than one loaded with fear or stress,” Moore says. “Keep conversations focused on choices and values instead of scarcity or fear.” 

To avoid creating undue stress, frame financial discussions in a positive light. For example, instead of saying, “We can’t afford that,” Moore suggests saying, “We’re choosing to save for something more important.” Emphasizing the opportunities that financial responsibility can bring helps children see money management as empowering, rather than something to be feared. 

Overcoming parental insecurities

Another challenge Moore often hears from parents is that they don’t feel confident managing their own finances, which makes them unsure of how to teach kids about money. “My advice is always to learn alongside your child—it’s OK to say, ‘Let’s figure this out together,’” she says.

By approaching financial education as a joint learning experience, parents can model how to handle money thoughtfully and responsibly. This method builds financial literacy for both parent and child and fosters a supportive environment where financial topics are seen as opportunities for growth and learning.

Consistency is key

Financial education should be an ongoing process—sporadic conversations or inconsistent rules can lead to confusion and mixed messages.

One report from the Consumer Financial Protection Bureau highlights that building financial capability early in life leads to stronger financial outcomes in adulthood. For example, youth who receive financial education are better equipped to make informed financial decisions and are more likely to experience financial stability later in life.

Making financial education a regular part of your family’s routine, with weekly or monthly check-ins, reinforces these lessons and ensures money management becomes an ongoing, natural process. In a world of increasing financial complexity, teaching your children how to manage money effectively is one of the greatest gifts you can give them.