Teaching Kids Money Skills

Teaching kids about the importance of money in life is crucial. Parents can help develop their kids’ financial habits beginning from a young age by turning everyday activities into learning experiences. As your kids grow and learn, you’ll want to change up the lessons. We make it easy for you by showing you examples of what you can do with your children through the years.

(Age 3- 5)

Introduce Kids to Money

From as young as age 3, introduce kids to simple financial concepts like saving and spending. At this point, you are already teaching them counting, so you can slip in the concept of money too. Play pretend shopkeeper with paper money and teach kids the basics of commerce in a fun way. A piggy bank is also a good idea. Try to get a glass jar so that your child can see the money multiplying. It will be far more effective, if you get three jars. Label them as “Savings,” “Spending” and “Sharing.” This will teach your children how, when and where to use money. Money from the spending jar can be used for getting small stuff like candies. Savings should be kept for something precious, whereas money from the sharing jar should be used for a cause or to help someone. 

(Age 4- 8)

Set Small Goals

Teaching your kids about money can be fun for them. Say your kid wants to get a toy. Teach them how to save up. Tell your child how expensive it is and how much is needed to buy it. Set simple, achievable goals so that your child can enjoy the little triumphs. Many things will come into play in this activity. Your child will learn that every penny counts. The exercise will give a sense of achievement to the kid and your child will learn to work patiently towards a goal.

Set Healthy Examples 

Money habits in children develop by age 7, but these habits take root way before. Children grow up watching parents and learn by observation faster. If you argue about money, it won’t escape them. If you don’t give a second thought to how the money is spent, they will also take it for granted. 

(Age 6-10)

Engage Kids in Financial Decisions

Teach kids how money must be spent. They should understand that money is finite and once you use it, it is gone for good. A fruitful experiment would be to take them shopping. When you buy stuff give the reason behind why you are getting it. Talk to them about your choices and explain that you are picking a certain thing because it tastes the same, but is cheaper so it makes a wise decision. Ask them if you should buy an item and whether it will be useful. This will keep them engaged and get the thinking clock ticking.

(Age 11-13)

Long-term Goals

Introduce complex money concepts because kids begin to develop a sense of reason at this age. They can make smart choices and weigh decisions regarding money matters. Now is the time to train them for long-term goals like getting something they really need other than toys.

Make Them Earn

Instead of giving monthly allowance or along with it, you can give money to them when they do chores. In other words, give them a commission. They will learn how money is earned with hard work and thus will be more mindful of where they spend it. 

Concept of Giving

At this stage, your child should not only understand the concept, but should be practically doing it. Help them pick a charity organization or to donate to a cause close to their heart. Discuss the cause, the worth of donating and how it can make an impact. This will help inculcate a sense of social responsibility in them.

(Age 13-15)

Make them Understand about Compound Interest

Get them a head start on smart investment by making the concept of compound interest familiar. Explain if they invest a certain amount how much interest they will get in a particular time span. Describe it to them in terms of numbers to give an accurate picture.


Introduce them to Bank Accounts

Set them a bank account. Encourage them to make regular deposits. Many banks offer this and for children, you do not need a minimum balance or have to pay a fee. This way your child will become accustomed to the workings of a bank and it will enhance their money management skills..

Discuss Wants Versus Needs

Your child must learn where to draw the line. There might be many things they want, but discuss what is important and worth having. Do not give them a free hand to buy whatever they want from their own budget. Priorities should be set right and they must learn to follow them. This will encourage a debt-free life.

(Age 15-18)

Make Your Teenagers Save for College

Teen graduating high school

Now is the right time to make them think about college education expenses and how to make it more affordable. Get them to save a portion for their higher education, so they do not have to take student loans. Discuss how to go about paying the college fee, what can be done in this regard and work out an approximate budget, so your child is prepared for the financial demands of higher studies.

Credit Card Knowledge

This is very crucial, because as soon as one turns the right age, all kinds of credit card offers pour in and it is easy to get lured by them. Do not let your child get burdened with debt at a young age. Teach them all the ins and outs of credit card usage, so they do not become a credit card victim.

Teach Them How to Make Money

Prepare them for the real world by teaching kids about money. The best way to learn how to handle money is to make your own. Guide your kids how they can earn with little jobs or by doing something they love. A college-going child must be into part-time jobs. But make sure your kid doesn’t overdo it and it doesn’t interfere with their studies. Once your child has knowledge of how personal finance works, it will make them more confident about their future financial moves and will set them up for success. 


Teaching kids about money is not that hard. It can start in bits and pieces, sometimes with fun activities and at times with practical experiences. With proper guidance, your kids can be smart consumers and investors, who understand the value of money and use it wisely.