Family · September 14, 2020

How to Teach Money Management for Kids of Any Age

Money is a big topic, and the task of teaching kids about how to manage finances leaves many parents feeling overwhelmed. But with the right approach, age-appropriate lessons that focus on money management for kids can be a fun and rewarding experience.

Teaching your kids how to manage money gives you an opportunity to share your financial values while teaching an important life skill. And depending on the schools your children attend, this might be the only financial guidance your children get. The foundation you set at home could have a big impact on your kids' success down the road.


Financial concepts to teach by age

Although you might feel eager to teach your kids about finances, remember to choose age-appropriate activities to introduce new concepts.

Ages 2 to 3

If you think your child isn't old enough to learn about money matters yet, you could be in for a surprise. Kids as young as age 2 or 3 may be ready to learn coin identification and other money basics. Play store with your preschoolers so they get familiar with the exchange of money for goods and acquire counting skills.

Ages 4 to 5

Kindergarten-aged children may enjoy role-playing games that use play money, like shopping or paying for restaurant meals. You could also take your kids grocery shopping. Work on their number recognition as they help you spot sale signs in the supermarket. Kids this age begin to understand the value of each coin and bill.

Ages 6 to 8

By this age, your kids understand that goods and services cost money. Teach them the difference between needs and wants. If they receive an allowance, introduce the idea of saving for a long- or short-term goal using a piggy bank or a savings account.

Ages 9 to 12

At this point, your at-home money management lessons can expand to include comparison shopping and budgeting. Hands-on learners might enjoy finding the best deal on shopping items and calculating how much your family could save by choosing the cheaper option. Get your 9- to 12-year-old actively involved in financial transactions when you hold or attend yard sales.

Ages 13 to 15

Now is the time to start talking about financial literacy concepts that need more complex math skills, such as calculating compound interest. Learn about the stock market and investing alongside your children by pretend-investing in the stock of companies your child recognizes, such as Disney, Nike or Coca-Cola.

Ages 16 to 18

As young adulthood approaches, many teens will take on part-time jobs. This is an opportune moment to teach your children the skills they'll need to manage their money in college or adulthood. Dive into discussions and resources on household budgeting, paying taxes, saving money, using credit responsibly and investing.

How parents can help kids improve financial literacy

Use a variety of methods to teach money management ideas to your kids at their different ages and stages. Your child could be a visual, auditory or hands-on learner, so choose the style they're most likely to respond to.

Today's parents can choose from a wide variety of financial literacy activities and resources, including:

  • Financial websites for kids with educational games and free resources such as United States Mint H.I.P Pocket Change Kids Site or the IRS' Understanding Taxes for Students for older kids. The Washington State Department of Financial Institutions has a great list of free online financial games and apps too.
  • Family activities such as shopping, budgeting, couponing and visiting the bank
  • Role-playing games such as Shopping or Restaurant Meals
  • Playing family board games such as Monopoly or Life

Remember, financial literacy is a big topic. Don't overwhelm your children with money matters all at once. Instead, introduce financial concepts gradually. Have fun, learn together and teach your kids the financial skills that will help them all their lives.

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This information is provided for educational purposes only and should not be relied on or interpreted as accounting, financial planning, investment, legal or tax advice. First Citizens Bank (or its affiliates) neither endorses nor guarantees this information, and encourages you to consult a professional for advice applicable to your specific situation.