6 Effective ways to teach young kids about money.

Money lessons for kids that will last a lifetime.

Teaching your kids about money can be fun — you can take a day-to-day activity and make it a learning moment, or turn a complex topic into a game. Your child has something to learn money-wise at every point in their life, from toddler to high schooler.

Teaching your child about financial responsibility is a gradual process that will build on itself from age one to 18. It's an ongoing discussion that starts in very early childhood and continues on into high school. Making sure your child has a firm understanding of finance and money growing up can help them secure a stable financial future in adulthood.

Here are some easy and fun ways to teach your kids about money.

  1. Explain where the money comes from.

When you’re teaching your kids about money, it’s important to teach them where it comes from. Money does not just come from mom and dad’s wallets.

The key is to demonstrate and demystify the relationship between work and money, “When you work, you get paid. When you don’t, you don’t get paid.”

  1. Preach the three principles: giving, saving, and spending.

Once you’ve established that money comes from work, teach your kids the three basic principles when it comes to money — giving, saving, and spending.

Giving is one of the most important of the three categories because you’re teaching them to feel the impact of helping others at a young age. 

As for saving and spending, encourage your child to set aside some of their money for savings and some to spend each time they get paid. Remind them that once their money is gone, it’s gone. And yes, your kids will make mistakes, but it's better that they make those mistakes under the safety of your roof.

  1. Play games that focus on money and spending.

Young children learn primarily through play. Classic games, like Monopoly or Life, teach your child more than just board game etiquette. They also teach youngsters important life skills, like purchasing real estate or saving up for retirement.

  1. Give them Allowance, but it shouldn't be just for fun stuff

Allowances should be issued with the understanding that some of this money can be spent on fun stuff, but some of it also has to go towards covering needs.

When deciding how much allowance to give, you’ll want to be sure that everyone understands what the allowance must cover. Is it school lunches? Snacks? Computer games? Sports activities? Field trip? Or buying their friend a gift? Always write it down initially so there are no misunderstandings later.

If your child is meeting their saving goals, consider throwing in a bit more cash the next week.

  1. Kid blew all their money and needs more? Seize this teachable moment

Many parents can relate to this scenario: your kid had money, but they spent it all at the toy store. Now, you’re at the toy store again and they want something but they don’t have the money. What do you do?

Teach them that when the money runs out, it runs out. It will be tough at the moment, but in the long run, you are teaching them to live below their means — and that’s the only way to win with money.

  1. Work on your own relationship with money

Young children are constantly observing — and absorbing — our behavior. If you’re spending above your means or stressing about money, your kids are likely picking up on this and learning that this is what money is: a thing of scarcity or scares, or whatever you project onto it.

 If they see you spending above your means, they’ll think that’s normal for everyone. You have the opportunity as their parent to lead by example and set them up to win with their money.


 Money management for kids doesn’t have to be complicated! So many adults are afraid to think about their money, which is why it’s so important to demystify earning, spending, and saving from an early age. By steadily increasing your child’s responsibility level with money, you’ll help them prepare for bigger money management challenges as they mature!