How Do You Teach Your Child About Money?

Money is often a sensitive topic for most parents. However, there is an urgent need for them to start talking about money with their kids. The problem is many parents need help with how to do this. So, how do you teach your child about money? 

How Do You Teach Your Child About Money?

Having money conversations with your kids can greatly help secure their financial future. This is a tricky endeavor considering that money is not a particularly interesting topic for most kids. 

So, to ensure that you pique your kids’ interest and set them on a path to financial literacy, you will have to: 

  • Set a good example for them to follow 
  • Introduce different money concepts at different ages 
  • Start with the basics before introducing them to more complex money topics
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Be a Good Example 

According to a report by the Michigan State Institute, children, especially infants and toddlers, learn by observing and copying their parents. So, even when you are not intentionally teaching them, your actions will significantly contribute to shaping their overall behavior. 

What does this mean? Before you embark on teaching your kids about money, you have to be good with money yourself. Your children will observe and emulate the way you handle money. If they see you spending money haphazardly, they’ll think that’s okay and start doing the same. 

So, you must be what you want your kids to be financial. Whether it is toddlers, preschoolers, or teenagers, your children’s money personality will likely mirror yours. 

Consider the Age

You don’t want to teach your toddlers about savings before they can learn how to speak. Neither do you want to teach your teenager in high school how to count money or recognize different currency amounts. 

Here is my point; the kind of money lessons you give your kids will largely depend on their age. The learning should start from when they are toddlers to when they finish high school. 

Here is a quick breakdown for you: 

Toddlers (2-3 Years)

Your kids will be too young to absorb and comprehend any kind of teaching at this age. Learning at this stage will mostly be through observing and imitating your actions. That could be you counting money, buying something at the store, or putting money in a piggy bank. 

Little boy putting coins in a white piggy bank

This is the perfect age to introduce them to money. You can get them to recognize different coins, play a shopping game, and match pictures of coins or notes with real money.

Preschoolers (3-5 Years)

Your kids’ cognitive ability at this age is a bit developed. However, they don’t yet fully understand the value of money or why it is important. That’s exactly what you should teach them at this stage. They must understand that money is valuable and should be handled with care. 

There are several ways you can do this: 

  • Start introducing them to counting money
  • Take them shopping with you and let them pay for stuff. This will teach them the concept of exchange. You have to give out money to receive something in return. They’ll also learn that money can only be spent once. 
  • You can also teach them how to share their money. For instance, you can hand them a penny and have them give it to someone else. 

Elementary Schoolers (6-11 years)

These are generally 1st to 5th graders. Now that they understand the value of money, it is time to teach them how to make their own money, ways to save it and how to wisely spend it. 

You can do this by: 

  • Paying them to do small chores around the house – The point here is to teach them that money is earned and doesn’t drop like manna from heaven. You can also reinforce positive behavior by rewarding your kids with an allowance when they finish their homework, get good grades, or help someone. 
  • Teaching them how to save – This is the perfect time to get them a piggy bank or a savings jar. Most financial experts recommend using a transparent mason jar since it encourages children to save more as they can visually see their savings growing. 
  • Teaching them to prioritize their money – For instance, you can explain to your kids that if they buy ice cream now, they won’t be able to afford the new toys they’ve always wanted. Let them understand what it means to be financially disciplined to achieve financial freedom. This will teach them how to overcome impulse buying and the need for instant gratification. 
Mother taking money out of her wallet to give to her daughter

Young teens (12-14 years)

These are mostly kids in 6th to 8th grade. At this stage, they are now ready for slightly advanced money concepts. You have already instilled sound money principles, and it is time to expand on what you have been teaching them. 

Specifically, you should now introduce them to the following: 

  • Careers and salary – Your kid already knows they have to work to get money. Now, they are ready to learn about how different careers can impact their financial future. 
  • Taxes, insurance, Social Security – Explain these and why they have to be deducted from your salary. 
  • Budgeting – Your kid already understands why it is important to prioritize their money. It is time to teach them how to budget for different things by creating a simple budget. 
  • Finance and social pressure – Teach your kids that it is not okay to spend money on something simply because their friends have it. They should learn to be content with what they have and differentiate between needs and wants. 
  • More advanced saving strategies – For instance, how much to save based on your earnings and financial responsibilities. You can also explain emergency funds, why they are important and how to build one. 

Teenagers (15-18 years)

These are mostly high schoolers. Your financial lessons have so far paid off, and your kid is ready to venture on a path of independence as they prepare to go to college. This is where all the things you have been teaching them about money start to take effect. 

Now, they are ready to learn through experience. This means you can now start teaching them about the following: 

  • Bank accounts – Teach them about checking or savings accounts and why they are important. Help them open pertinent personal bank accounts and learn how to deposit and withdraw money from them. 
  • Credit cards – While you don’t want your kids to start using them at this stage, you should demonstrate how they work and their effect on your financial life. Explain what interest charges are and why paying off your credit card on time is important. 
  • Student loans – Now that your kid is getting ready for college, you must talk to them about them. What are these loans? Do they need them? What happens if they take these lessons 


Money is a complicated topic, even for adults. So, if you want your kids to effectively comprehend the concept of money, you need to be methodical about it. Start at an early age and understand what to teach at each stage. Even more importantly, be a good example and let your kids learn by emulating your money personality 

Jared Bauman is the owner and editor of He has started and sold several companies, along with owning several investment properties. His interest in personal finance started as a young kid, developed through his entrepreneurial ventures and real estate investments, and continue through his conversations with friends and colleagues.

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