As a full-time working mom in my 30s, I understand the importance of preparing our children for the real world, and teaching kids about money is one of the most valuable lessons we can impart. Financial literacy helps kids develop responsibility, independence, and decision-making skills that will benefit them throughout their lives. But where do we start, especially when time is scarce?
Here’s a practical guide to teaching kids about money, filled with everyday strategies that work for busy parents like us.
Why Financial Literacy Should Start Early
Teaching our kids about money doesn’t have to be complicated, but it does need to start early. The earlier they understand how money works, the better they’ll be at managing it as adults. Starting young also helps take the mystery out of finances, making it easier for them to grasp more complex concepts like budgeting, saving for long-term goals, or even understanding debt as they get older.
Kids are naturally curious, and introducing money lessons early helps them develop a healthy relationship with finances—one based on knowledge rather than fear or confusion.
1. Give Your Kids an Allowance to Teach Budgeting
One of the simplest ways to teach your kids about money is by giving them an allowance. This provides a tangible way for them to start learning how to budget. Whether they receive weekly pocket money or payment for completing chores, having their own money gives them the responsibility to make choices about spending, saving, and even giving.
Set guidelines for how they can manage their money. For example, encourage them to set aside 10% for savings, another 10% for charity, and the rest for spending as they wish. This teaches them about financial balance and makes them think before they spend everything at once.
2. Set Savings Goals
Teaching kids how to save for something they want is a great way to help them grasp the concept of delayed gratification. Whether it’s saving for a new toy, a bike, or even a family vacation, setting a savings goal shows them that patience pays off.
You can help them visualize this by using a savings chart, a piggy bank, or even opening a junior savings account. Each time they add money, they’ll get excited about how close they’re getting to their goal. This lesson not only helps with saving but also instills pride in achieving something through planning and effort.
3. Play Money Games for Real-World Learning
If you’re a busy mom like me, turning money lessons into games can make learning fun and effortless. Board games like Monopoly or The Game of Life can help introduce concepts such as buying properties, paying rent, and managing a budget. Even a simple game of pretend store, where your child “sells” you toys or books and gives change, helps reinforce money management skills.
There are also apps and online games tailored to teach kids about finances in a fun, engaging way. These are especially useful if you want to integrate technology into their learning process.
Game night is always a fun time to introduce financial lessons to our kids! The author of Rich Dad Poor Dad created this game!
4. Involve Them in Family Budgeting
Kids love feeling included in adult decisions, and involving them in the family’s financial conversations can be eye-opening for them. Next time you plan the grocery shopping, discuss how much you plan to spend and let them help find the best deals. This shows them how to stick to a budget while making thoughtful choices.
When planning vacations or big purchases, explain the steps you take to save up for them. They’ll see firsthand that even for adults, managing money is all about planning and prioritizing.
5. Encourage Entrepreneurial Thinking
Teaching kids about earning money can go beyond allowance. Encourage entrepreneurial activities like setting up a lemonade stand, selling homemade crafts, or helping neighbors with tasks like dog walking or lawn care. These activities give your children the chance to see the value of hard work and creativity.
Not only will they learn to manage the money they earn, but they’ll also begin to understand basic concepts like customer service, profits, and reinvesting in their “business.” It’s a hands-on lesson in financial independence that’s both educational and rewarding.
6. Talk About the Difference Between Wants and Needs
One of the most valuable lessons we can teach our kids is the difference between wants and needs. In a world full of advertisements and instant gratification, it’s easy for kids to think they need the latest gadget or toy. But when we take the time to explain that needs (like food, shelter, and clothing) come first, and wants are something we save up for, they start to understand how to make better spending decisions.
This is also an opportunity to talk about the importance of making thoughtful purchases. Before they buy something, ask them to wait a day or two and think about whether they really want it. This simple step can help them avoid impulse buys and learn to prioritize.
Get my V POWERFUL WEALTH BUILDING STRATEGIES HERE
7. Model Good Financial Behavior
Our children look to us as their first teachers, and they pick up more than we realize just by watching how we handle money. If we model good financial habits—such as budgeting, avoiding impulse purchases, and saving for future needs—they’re likely to follow our lead.
When we sit down to pay bills or review our budget, consider involving them in the process. Explain how you make choices about spending and saving, and show them that managing money requires careful planning and discipline.
8. Teach the Value of Giving
One of the most heartwarming lessons you can teach your kids about money is the value of giving. Whether it’s donating to a cause they care about, buying a gift for someone in need, or simply sharing their resources, giving teaches them empathy and social responsibility.
Encourage your children to set aside a portion of their allowance or earnings for charity. This habit not only teaches financial generosity but also helps them feel empowered to make a difference in the world.
Final Thoughts: Raising Financially Savvy Kids
Teaching kids about money doesn’t have to be a daunting task. By making money management part of your everyday life and using fun, relatable strategies, we can equip our children with the financial skills they need to succeed.
Remember, the goal isn’t perfection. As a busy mom, I know time can be limited, but even small conversations about money can have a big impact. By teaching kids about budgeting, saving, and the value of hard work, we are empowering them to become responsible, financially literate adults.
We may make a commission off of affiliate links in this article.
Get my V POWERFUL WEALTH BUILDING STRATEGIES HERE
Hi! I’m Allison Conway, founder and CEO of Brains and Beauty School. A little more about Brains and Beauty School. Brains and Beauty School harnesses the power of feminine energy by supporting women establish their authority in business, boost their financial confidence, and cultivate a sense of outward confidence.
