How to Teach Kids About Money Management: An Age-By-Age Guide

Teaching kids about money is one of the most valuable life skills you can impart. By introducing age-appropriate money lessons and activities, you can help your children develop healthy financial habits that will serve them well into adulthood!

Guest post by Jonathan Calos

How to Teach Kids About Money

Whether your child is a preschooler or a teenager, there are fun and practical ways to teach them about saving, spending, and managing money responsibly.

These fun and practical ideas are crafted to make learning about money both engaging and relatable for kids, while laying the foundation for their long-term financial success.

Preschool Kids: Introduce Basic Money Concepts

At this age, kids are curious and eager to learn. Start by introducing the concept of money and its purpose in a simple, relatable way.

1. Use Play Money for Pretend Shopping

Set up a pretend store at home using toys, snacks, or household items. Then, give your child play money and let them “buy” items. This activity helps them understand that money is exchanged for goods.

2. Teach Coin Recognition

Introduce coins and their values through fun games. For example, lay out pennies, nickels, dimes, and quarters, and ask your child to identify each one. You can also sort coins by size, color, or value.

3. Start a Savings Jar

Give your child a clear jar to save coins. Explain that saving money means setting it aside for something special. When the jar is full, celebrate by letting them use the money for a small treat or toy.

Elementary-Aged Kids: Build Money Management Skills

Then, as kids grow older, they can start learning more advanced money concepts, such as budgeting and making choices.

4. Give an Allowance

An allowance can be a great way to teach kids about earning and managing money. Instead of simply giving them the money, tie the allowance to simple chores or responsibilities, and encourage them to divide their money into categories like saving, spending, and sharing.

5. Play Money-Themed Board Games

Games like Monopoly Junior or The Game of Life are excellent tools for teaching kids about money in a fun way. These games introduce concepts like earning, spending, and saving while encouraging strategic thinking.

6. Set a Savings Goal

Help your child set a small savings goal, like buying a toy or book. Create a visual chart to track their progress. This teaches patience and the value of delayed gratification.

7. Create a DIY Lemonade Stand

Help your child occasionally set up a lemonade stand or small business. This teaches them about earning money, pricing, and customer service. Plus, it’s a fun way to spend time together.

Middle School Kids: Introduce Budgeting and Smart Spending

At this stage, kids can start learning about budgeting, comparison shopping, and making informed financial decisions.

8. Create a Simple Budget

Teach your child how to create a basic budget. For example, if they receive $10, show them how to allocate portions for saving, spending, and giving. Use real-life scenarios, like planning for a family outing, to make it relatable.

Psst…Crystal here! My One-Hour Budget for Teens product can help walk your child through how to set up a basic budget. It also comes with a Parent’s Guide!

9. Go Grocery Shopping Together

Take your child grocery shopping and give them a small budget to buy a few items. Show them how to compare prices and look for deals. This activity teaches them to make smart spending choices.

10. Introduce Charitable Giving

Encourage your child to set aside a portion of their money for charity. Let them choose a cause they care about and donate the money. This teaches empathy and the importance of giving back.

Teenagers: Prepare Them for Financial Independence

Teenagers are ready to learn more complex financial concepts, such as earning, saving for the future, and understanding credit.

11. Open a Bank Account

Help your teen open a savings account and teach them how to manage it. Show them how to track deposits, withdrawals, and interest earned. This introduces them to the banking system and the importance of saving.

12. Teach the Basics of Investing

Introduce your teen to the concept of investing. To begin with, use simple examples, like investing in a company they know, and explain how investments can grow over time. Apps like Acorns or Stockpile can make this process more engaging.

13. Discuss Credit and Debt

Explain how credit works and the importance of using it responsibly. Use real-life examples, like paying off a credit card balance, to illustrate the consequences of debt. This prepares them for managing credit in the future.

14. Host a Family Money Night

Turn learning about money into a family event. Spend a night together learning about money and, during it, play games, discuss financial goals, and share stories about saving and spending. This makes money conversations fun and less intimidating.

15. Expert Tip: Lead by Example!

Most importantly, children learn by observing their parents. Model good financial habits, like budgeting, saving, and avoiding impulse purchases. Share your own money-saving tips and experiences to make the lessons more relatable.

In summary, teaching kids about money doesn’t have to be boring or overwhelming. By incorporating age-appropriate lessons and fun activities, you can help your children develop a strong financial foundation.

Start early, be consistent, and make learning about money a positive and engaging experience. Remember, the goal is to equip your kids with the knowledge and skills they need to make smart financial decisions throughout their lives. With patience and creativity, you can set them on the path to financial success!