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Why It’s Never Too Early To Teach Your Kids About Money

It’s only reasonable for parents to want their kids to achieve financial success, whether they themselves had a handle on their finances or not. That’s why financial education should be a key lesson to teach your children. Doing so will ensure they don’t end up spending more than they earn, or racking up excess debt in the future, whether that’s a result of student loans, credit card debt, or something else entirely.

Though it’s never too late to learn about money, the earlier you can start teaching them, the better. Here are some strategies you can use to educate your kids about money at different age levels.



The moment children are born, they begin learning at an incredible rate. They first learn by imitating, often following in the footsteps of their parents. Everything you do around your kids, they absorb like a sponge.

Show them what healthy spending habits look like. If you can, make it fun by using toy money, and showing them how saving works, or how to count what you have. You could even make an example of spending only as much as you have or saving for something important in the future.


Preschoolers & Kindergarteners

While they still might not fully grasp the concept of money by this point, kids can be taught that they need to pay for certain things they want. Bring them on your next trip to the grocery store, bring cash with you, and let them help you figure out if you’re giving the cashier the right amount for what you’re buying. Maybe even let them take the change, and use it to buy a treat afterward.

This is also the perfect time to teach them essential skills, like counting using simple objects. Eventually, you can move on to coins and dollars. Explain to them the difference between the value of different coins and bills, then group them together.

You’ll also want to teach them what it means to exchange money for an item. Start by giving them a single dollar to spend at the store. Help them figure out what they can buy, then let them be the one to hand over the money at the checkout.

First to Fifth Grade

By this point, they should have a basic grip on purchasing power, and be yearning for deeper learning. Now’s the time to go more in-depth about saving, earning, and the concept of opportunity costs.

To have kids earn money, you can start by having them do chores around the house that they’ll be compensated for. Once they’ve been given the money and realize how often it’s given to them, they can start to see the pattern of what it’s like to earn money at a workplace. According to a survey done by Junior Achievement USA, 82% of children who do their chores, make an effort to get good grades, and do their homework regularly are rewarded with an allowance. Offering an allowance is also a great method for instilling healthy habits, financial or otherwise, in your child.

When it comes to saving, you could get them a piggy bank (or even a simple jar would do). If the container is clear, it provides a visual representation of their money growing that’s tangible. To add to this, take them with you the next time you visit the bank and explain in simple terms what you’re there to do and why. If you believe they’re ready, you can ask your bank about what children’s accounts they offer. Of course, you’ll be able to help them utilize it in the best way possible when they have their own account. This can really solidify what you’ve been teaching them about money.

Taking these steps will do wonders for your child’s financial future. There’s nothing more powerful than direct, hands-on learning, and starting from a young age will equip your child with the financial literacy needed as an adult.