By Chandler Sullivan
August 14, 2024 | 7 Min. Read

Do you remember how you first started learning about money? Was it by setting up a lemonade stand? Selling homemade items? Or maybe just watching how your parents dealt with shopping for groceries?

Our upbringing is a huge part of our relationship with money as our kids observe and copy everything we do.

As parents or guardians, we all want our kids to grow up with a healthy understanding of money. Teaching them good financial habits early on can set them up for a lifetime of economic success. But how do you go about it?

This blog looks at some practical and fun ways to help your kids build better money habits so they can be ready for the future.

No, you don’t have to tell your kids about your bad spending habits if you don’t want to, but it is a great idea to show that money habits aren’t the easiest goals to always obtain.

Talking about money can feel weird in many families. The best way to make it less awkward is to have regular family talks about money where everyone is involved. Some parents might want to keep young kids out of these talks to protect them, but these discussions don’t have to be serious or scary!

Keep in mind that sharing positive money stories is a simple way to make it normal for your family to talk about money. We suggest having a family money talk at least once a month where everyone can share their thoughts and help with the family’s money goals.

Including kids of all ages in real-life money decisions is another good way to keep the whole family thinking about money. At the grocery store, you could let your 5-year-old choose the bread from a few options and talk about why they picked it. Or, if you’re shopping for school supplies, you could compare prices to help them learn how to save money.

Teaching kids about finances can be achieved through several methods. First, lead by example, as kids learn a lot by observing their guardians. Demonstrate good financial habits like budgeting, saving, and making thoughtful purchases, and talk to them about why you make certain economic decisions.

Second, use real-life scenarios by involving your kids in everyday financial activities. Take them grocery shopping and explain why you choose certain items over others, showing them how to compare prices and look for deals.

Third, play money games, as there are many educational games and apps designed to teach kids about money! Board games like Monopoly or online games can make learning about finances fun and interactive. Lastly, if you give your kid an allowance, use it as an opportunity to teach them about budgeting. Encourage them to divide their money into categories: saving, spending, and giving.

Remember, setting savings goals for things they want to buy helps teach patience and the value of saving. It is important to make money a familiar topic of conversation by discussing financial news, sharing your own experiences, and answering their questions honestly! Kids are curious beings and their curious minds should be treated with care.

Here are some online games:

You can start teaching your kids about money as early as preschool. At this age, they can begin to understand basic concepts like counting money and recognizing coins and bills.

As they get older, you can introduce more complex ideas like budgeting, saving for specific goals, and the importance of not spending more than they earn. Change your lessons to their age and maturity level:

You can find more about age and money topics with this Parents.com blog.

Ultimately, the decision of when or what to teach your kids about money is up to you.

Spending habits refer to the way individuals spend their money. This includes what they buy, how often they make purchases, and how much they typically spend. Teaching kids good spending habits involves helping them understand the difference between needs and wants, making informed purchasing decisions, and learning to prioritize their spending.

For example:

Remember, turning everyday instances into examples of learning for children is one of the best ways they can learn first-hand about money habits. Even if you don’t have the best money habits (we have all been there), you can still teach your kids valuable lessons about saving and spending!

You should teach your kids about the value of money, helping them understand that money is earned through work and explaining different jobs and how people earn money. You should show your kids how to create a simple budget (depending on how old they are), explaining that a budget helps plan spending and saving for future goals.

Additionally, encouraging kids to save a portion of their allowance or any money they receive is important, and discussing short-term and long-term savings goals can be beneficial. Teaching smart spending habits, such as thinking before making a purchase and researching to find the best deals, is also important (as mentioned before). You can also make a point to emphasize the importance of giving back and encourage your kids to set aside a portion of their money for charity or to help those in need (if that is something you value).

 When deciding on an allowance for your kid, it’s important to remember that you know your kid best. Don’t let your kid or what other parents do influence you too much. Some parents don’t like giving money for chores, while others think allowances are good motivators.

First, look at your own budget to see how much allowance you can afford. Then, think about what your kid needs money for and what goals you have set with them. The amount will be different for a 5-year-old compared to a 13-year-old.

Once you’ve decided when, why, and how much to give, make sure the rules are clear: Will the allowance depend on chores or behavior? Do your kids need to save part of it? For older kids, could you give more allowance and have them buy some of their own things?

Allowance can teach your kid how to manage money while still having your guidance if they make mistakes. If an allowance isn’t your favorite or most affordable idea, there are plenty of resources you can check out below.

While there may not be a specific course dedicated to teaching kids about money, there are plenty of resources available. Age-appropriate books that teach financial concepts, online resources like websites and apps designed for financial education, and workshops or classes on financial literacy offered by some communities can be very helpful. However, parental guidance is important, and using everyday moments as teaching opportunities can make a significant difference. This also gives you another opportunity to bond and create memories!

If you want to learn more about the benefits of teaching your kids smart money habits or take a look at specific resources tailored for children, check out this FDIC article for more information.

Here are other specific resources:

If you or another guardian don’t feel confident or in control of your own money, you might not want to talk about it with your kids. But waiting until everything is perfect isn’t helpful (or realistic).

Kids are affected by how their parents handle money, and whether or not they talk about it. Being open about money helps kids understand its importance and learn from any mistakes.

Talking about money can make you feel more confident, so don’t worry if your finances aren’t perfect or if you didn’t start teaching good money habits early. It’s never too late to start. Many adults never talked about money with their parents; do you want the same for your kids? You don’t have to be perfect—just start the conversation.

Although we don’t offer specific kid accounts, we are here every step of the way in your financial journey. We have plenty of online resources that you can check out for educational purposes:

If you have any questions about teaching your kids financial literacy or just questions about your own finances, reach out to us today!

By incorporating these practices we discussed into your everyday life, you can help your kids develop strong, positive money habits that will benefit them throughout their lives.

Remember, the key is to make learning about money fun and engaging, and to be patient as they develop these important skills. Happy teaching!