How to teach your kids about money at any age

Like good eating habits, time management and social skills, financial education can help set your kids up for success as they grow. It’s never too early to start teaching kids about money – and it doesn’t have to be boring, either. Lessons can be worked into play and everyday activities. In this post we’ll give you tips on how to teach kids about money and why financial education is crucial to their future success.

Set your kids up for financial success.

The current state of financial education has significant room for improvement. In the 2022 TIAA Institute-GFLEC Personal Finance index, which measures the level of financial literacy in the U.S., adults correctly answered, on average, just half of the 28 basic money questions. Changing those numbers starts with what kids learn at home. Instilling the good financial habits early can help them be better prepared for whatever their future holds. As parents, you can set an example and show your kids that investing time into these habits will set them up for success as they become more independent.

Money lessons for toddlers, teens and in between.

Explaining money to a child may seem complicated, but there are ways to make the basics of buying and saving fun – and easy to understand.

Pre-K and kindergarten.

little-girl-pointing-at-bread-in-dads-armsAccording to investment management firm T. Rowe Price’s senior financial planner Stuart Ritter, children as young as five are able to recognize the purchasing power of money. This means parents can start using simple scenarios to illustrate how to use money responsibly.

For example, if your child reaches for something in a grocery store, rather than just saying “No, we can’t afford that,” respond with something like “We have five dollars for a treat. Let’s look at prices and pick something out.”

As your child starts preschool and kindergarten, you can start to implement slightly more complex money lessons. At this age, kids are learning to count, socialize, and talk about their feelings – all of which are important for early financial education.

Here are some fun ways you can involve your young learner in simple money management lessons:

Turn shopping into a game.

Bring your child to the store with you. Show them the price tags, sales sections, coupons, and special deals. Turn the act of saving money on your usual products into a game they can “win” by making the right choices.

Let them decide how to spend.

Offer your child a few dollars to pick out a treat. This is a great chance to explain quality vs. quantity – they can either choose a few little things or one big thing. If they’re up for it, they can even pay at the register themselves to see how the exchange works.

Keep a visual “savings account” together.

Use visual tools like a checklist or physical savings jar at home so your child can see their money grow. Periodically count it together, and then as a reward for saving, pick a fun family outing or treat to splurge on.

Elementary school.

According to experts, kids between eight and twelve can start learning about more complex money topics like saving and investing. As your child develops better math and comprehension skills, they can start managing their own money. This can be a good time to implement an allowance or open a savings account for your child. The OnPoint Savers Account is a high-yield savings account reserved for members 17 and younger, and is an opportunity for them to save their money while learning about the power of interest.

Identify bigger goals.

Encourage your kids to make practical savings goals. What do they want to buy with their own money? A bike? New shoes? A tool like a vision board can help get them excited about the future and serve as a visual reminder of what they’re saving for. Around the holidays, encourage them to use their savings to help others by making a donation together or buy a family member a gift.

Be open about family finances.

Even though it can be stressful, it’s important that money isn’t considered a “grown-ups only” topic. If your child is curious about household finances, bring them into the conversation. While they likely don’t need to know every detail, you can explain your income sources and family savings goals. Talking about money together can make it a less scary topic and feed their curiosity.

Middle school.

teenage-girls-trying-on-sunglasses-at-malAs kids get older, they naturally start thinking about their future. You might want to sign your middle schooler up for a youth debit card so they can spend on their own. In addition, as they begin to use the internet more for communication or school, this is an important time to discuss online banking and security.

This is also an important time to talk to your child about wants vs. needs when it comes to spending. Because kids at this age are starting to think about more practical future goals, have a conversation about larger expenditures like college and how they compare to short-term goals like clothes, toys or electronics.

High school.

By law, most states allow kids to get their first job at age 14. A teenager’s first part-time or summer job is an important opportunity to learn to manage their own budget more independently, as they are now getting money from a source other than an allowance or gift. While you should still be talking to your kids about their savings and helping them stay on track, independence is a crucial step to teach teens about money.

Whether or not your teen is earning their own money in high school, you can help to sharpen their financial education by evolving your conversations about long-term plans. Introduce them to the concepts of credit and interest rates, or even how to do their taxes.

Early adulthood.

College can be a time for financial missteps, given the additional freedom and opportunity that comes with leaving home for the first time. A 2021 study revealed that the average college student has more than $3,200 in credit card debt, which can be tough to manage on a tight budget. However, this doesn’t have to be the case. If your child learned about saving and budgeting as a child, they’re already more prepared to set out on their own than their peers who didn’t get these lessons.

You may not be in charge of your grown child’s finances anymore, but you can still support their financial education by encouraging them to ask you questions and walking them through their first major financial decisions, like taking on a student loan or purchasing their first car.

Raising financially responsible kids: Start early, stay positive.

It’s never too early – or too late – to start teaching children about money. Your child will develop their first money habits based on what they see at home. Lead by example and set them up a healthy financial mindset early on. However you choose to engage your kids, teaching them about money from a young age will set them up for a better financial future.

Whatever strategies you use, remember to make it fun. A healthy financial mindset starts with a positive attitude toward money. Explore our blog for inspiration on starting conversations with your kids about budgeting, cybersecurity, and more.



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