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May 26, 2021

9 Tips for Teaching Your Kids About Money at Every Age

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9 Tips for Teaching Your Kids About Money at Every Age

One of the first things children learn about money is how to spend it, especially at a young age. However, when you consciously teach kids about money, you can expand their world views, and they start to see how personal finance works in the real world and understand how to save and invest.

If you've ever asked the question, "How do I teach my child financial responsibility?" then this article is for you.

A big part of growing up is knowing about credit scores and where to borrow money in different situations. Now is the time to introduce your teenagers to the basics of loans and credit scores.

Here's 9 useful tips to help you discuss money management with your kids and improve their financial literacy.

3 Tips for Teaching Children Ages 3-6 About Money

Introduce the Concept and Begin Setting a Good Example

You may not know this, but children learn a lot from watching how you behave. Children are like sponges soaking up phrases you often use or common behaviours from ages three to six.

By watching you, children also learn about your money habits. If you eat out often instead of making home-cooked meals, or if you argue about grocery bills with your partner, they'll know. Commit to setting a good example about money, spending habits, and even credit score discussions that your children can follow as they grow.

Turn Saving Money Into a Game By Setting Up a Savings Jar

Young children cannot resist a good game, so take advantage of this to teach them some lessons in personal finance. Make sure the game is fun — the more visual it is, the better. A great idea would be to set up a clear savings jar or piggy bank that allows them to watch how their savings grow.

It's even better if you mark different milestones on the jar, and you can recognize your child’s efforts with an extra reward when they hit these milestones. The rewards could be time at the park, a play date, or even better, some additional money in the savings jar.

Remind Children That Items Cost Money

Money seems like an abstract concept when children don’t fully recognize its value. An essential financial lesson to teach your kids is showing them that items cost money. An intelligent way to do this is by getting them actively involved in financial planning.

For instance, take your children along with you for a grocery shopping trip, and let them watch as you pay for things. If they want a toy or snack, you can grab some cash from their savings jar and use this to purchase the item for them.

3 Tips for Teaching Kids 7-12 About Money

Provide Them With Tasks to Earn Money

One of the best ways to teach your children about money is by getting them to work for their cash. Consider paying your kids to do certain small household chores like cleaning the living room and mowing the lawn. At this point, you can open a savings account for them where you deposit their allowance every month.

Teach your children to see their allowance as a reward and not necessarily an obligation. This means there are chores they'll still have to do without pay as a part of the family. However, when they go the extra mile and complete other tasks, they can receive extra money.

Implant Savings Habits

Learning to save money is a life skill you should impart to your children early. At first, children think money is made to be spent, but you have to teach them how to save money diligently.

One way to build their savings habit is encouraging your children to save for short-term goals like buying a new toy or getting a new dress they want. As they grow older, they'd learn to save for long-term financial goals. You can agree to pay interest on the money when they smash their savings goals.

Teach Them How to Make a Simple Budget

Children need to learn how to make smart financial decisions like drawing a simple budget for their expenses. Budgeting teaches children how to live within their means and avoid squandering money.

For instance, you can give your kids some money and ask them to allocate the funds to different spending, savings, and donations. Watch how they apportion funds to each of these categories, and you can also ask them to explain their decision-making process.

3 Tips for Teaching Your Teenagers About Money

Open a Bank Account for Your Teenager

At this stage, you should set up bank accounts for your teenagers as part of their financial education. Two types of accounts readily come to mind — a checking account for daily expenditures and a savings account to keep the money long-term and earn interest.

To keep track of how they spend money, you should be a joint account holder and have complete access to a record of all the transactions. Consider linking a debit card to the checking account too. While you want to regulate their expenses, you should not be overbearing.

Introduce the Topic of Credit Scores

At one point or another in their lives, your teen will need a loan urgently, so it's best they start building a good credit score now. A good credit score qualifies people for apartment leases, mortgages, and payday loans in the future.

At first, teaching your teenager about credit scores seems complex and confusing. The best way to go about it is using illustrations to show how credit and credit cards work. Show your teenager copies of your credit report or mortgage statement, so they see how things work in real-world situations.

Get Them Excited About Investing and Retirement

It's not too early to start talking to your child about investments and retirement. While it may not be the first or even the second thing on their mind, understanding how these two concepts work can drive your teen to save more money now. Tell them they can always invest their savings in profitable opportunities and earn impressive interest rates.


Now is the best time to start teaching your children about money and improving their financial literacy level. When your kids understand the value of money at an early age, they are better equipped to make smart financial decisions in the future, even when you are not there.

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