Skip links

How to Teach Your Kids About Money

We all want to set up our children for success. But teaching financial lessons isn’t always as intuitive as teaching how to read or ride a bike. Money can seem complicated enough from an adult’s perspective, so how do you make sure your kids get it? Here are some tips on teaching money management lessons appropriate for your child’s age:

Younger than 5 years old

Include your kids in financial conversations. Young children love to copy their parents, so this age is a great time to teach by example. Say your family is planning a trip. You can then show your kids how you’re saving money to prepare. Point out some of the things you’re sacrificing in the short term to afford the payoff of a fun vacation. This is also a great time to reinforce the difference between needs and wants. Explain some of your choices while shopping to show your child that you can’t have everything you want.

6 to 12 years old

Have your kids help with shopping. Next time you’re going to get groceries, have your child help make a shopping list based on your set budget. Plan out some essential meals and allow a few items as special treats. Once you hit the store, let your child take the lead in selecting items, guiding them toward making better decisions. After you get home, look at the receipt and talk over whether you hit your budget. Point out the importance of getting the essentials and how extras can add up quickly.

13 years old and older

Prepare them for the real world. Consider giving younger teens an allowance and insist that they use part of it to pay for a monthly expense, such as their portion of a cellphone bill. Be sure that the expense is larger than a single allowance payment, which will help teach them to save a portion every time they get paid. For older teens, it’s time to learn the necessity of a budget. Using your household budget as an example, explain how you find monthly income and then deduct necessary expenses to get a monthly budget. After this, ask your teen to try creating a budget themselves. Have them calculate their rough income, expenses, and what’s left. Then, challenge them to stay in this budget without any assistance from you.

Start Them Saving

Learning to save is an excellent lesson for any age. Open a savings account with your child at Central Minnesota Credit Union, where they can watch their savings grow as they do. Learn more about our Youth Savings Accounts at mycmcu.org/accounts/youth-savings.html.