Article | 3:37 min read

How to Teach Your Kids About Money

Budget and Save

Use these tips to start a conversation with your children about the value of money.

A parent and child counting money

Teaching your children to be financially responsible early on in life can take quite a bit of work and patience. Learning how to set limits, create a budget and resist impulse buys are all benefits your kids will receive if they understand how to manage their finances. Here are a few ways that you can introduce the value of money to your children.

Start young. By third grade, children start learning hands-on methods to work out math problems, decimal points, and working with money.1 Although it is never too late to develop good money habits, it’s beneficial to start the conversation when your children are young. You can show them that saving money is fun! Let them pick out a piggy bank, and make a game of seeing how much money they can save.

Talk about money. Speaking comfortably about finances is an important part of helping kids develop a healthy relationship with money. In your every day activities, include your children and explain to them how understanding finances can contribute to good decision-making.

At the bank. When heading to the bank, have your children tag along for the ride. Use this as an opportunity to show them how transactions work, how a bank operates, what interest is and how the ATM works. For a bit of a field trip, ask the manager to give a tour of the bank – you may even be able to check out the vault!

At the grocery store. Bring the kids to the grocery store on your next trip. This is an easy place to differentiate between “needs” and wants.” You can explain how children need milk for strong bones, and that soft drinks are a want. Talk to them about how you choose to spend your money – the benefits of comparing prices, using coupons, or purchasing store brands.

Model responsible money habits. Kids learn behavioral habits from their parents – and money management is no exception. Be a good example for your children by setting expectations and norms surrounding how to conduct your finances.

You can try to create examples that they will learn from, like fixing something if it breaks, instead of tossing it out and buying another one. More responsible money habits to model include avoiding retail therapy, setting a budget before going to the store, and steering clear of impulse purchases.

Chores and allowance. You can teach children the value of money through weekly chores and earning an allowance. It’s important to see an allowance as a paycheck, rather than a weekly gift. This can help teach your children that hard work receives a reward.

Spending and saving. Once your child has started their chores and receiving their “paycheck,” that’s a good opportunity to begin introducing lessons about budgeting, saving, impulse control and delayed gratification.

If you open a savings account for your child, encourage them to put a portion of their allowance into savings, and watch how big the number can get. You can also discuss a savings plan with your child, help them set savings goals for something they want. Whether it’s for ice cream, a trip to the amusement park, or to purchase a new toy. Once they reach their savings goal, you can have them consider whether they’d like to spend it or continue saving.

Using credit cards. As your child gets older and has a reliable job of their own, you can consider introducing a credit card to grow their credit history. It’s important to explain that credit cards are a loan and to pay them off. A good example is having your child use their credit card for set purchases like filling the car with gas. Then, having them pay off the amount right away.

With the increased use of online banking, paying off a credit card is simple and they can do it any time. Teaching your child how to use a credit card correctly can be incredibly beneficial. By the time they reach their 20s, they’ll have an established credit history.

Teaching your child the value of money is an important practice that starts at a young age. Through these tips, you can instill that hard work and saving money will be beneficial in the long run.


1Math Skills: What to Expect at Different Ages, Understood

The Importance of Understanding Finance Fundamentals, ECT


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