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Teaching Kids About Money- 16 Ways To Make It Easy

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Teaching kids about money

Teaching kids about money has never been more important than now! With the world’s dynamics changing rapidly, financial literacy has become the single most essential pot of knowledge that your child requires to grow up into a successful person.

While many believe money doesn’t buy you happiness, it may not be entirely true because it is money that buys you tasty food, cozy shelter, comfortable clothes, good education, and various other desires that are linked to happiness. This makes money a paramount topic to teach about from an early age.

“Money is a guarantee that we may have what we want in the future. Though we need nothing at the moment, it ensures the possibility of satisfying a new desire when it arises.” – Aristotle


Teaching Kids about Money—16 Ways to Make it Easy

Teach kids about money

Most of us have grown up in a family where if you asked for some dollar bills or even brought up money as a conversation topic, you would be told “Money doesn’t grow on trees, you have to earn it.” Yet, not a single voice may explain how and where to get it.

Teenagers are usually eager to have a lush lifestyle, where they can do everything they want and desire for. However, this only becomes possible when they have good knowledge about how to make money and handle their finances.

Today, we have 20 great tips you can follow when teaching kids about money. These monetary guidelines will lay a strong foundation for your growing star, and help them learn about the importance and proper use of money!

We have divided these tips into different age categories, so you’re giving off just the right amount of information your kid needs to learn how money works.

Teaching Preschoolers & Kindergartners about Money (Ages 2 to 6)

Before you start discussing money with your kids, it is vital to consider their age. If you want to begin money lessons at an early age, refrain from talking about complex financial concepts. 

Instead, explain the fair deal of money—you need money to buy things and that you get money by working.

1. Talk about Currency

Start teaching kids about money by talking about your currency first—what are different coins and notes in the country, their value, usage, and importance.

For instance, there are five major coins used in the U.S. today, also called circulating coins:

  • Penny: A penny is worth one cent. It is a copper-plated zinc coin, which has Abraham Lincoln on one side and Lincoln Memorial on the opposite side.


  • Nickel: A nickel is worth five cents. The coin is larger than a penny coin, and is made with nickel and copper blend. It has Thomas Jefferson on the front end and Monticello on the back end.


  • Dime: A dime is worth 10 cents. Even though it is worth more, the coin is smaller than both a penny and nickel coin. It has Franklin D. Roosevelt on the front and a torch on the back.

Activity: Put a penny, nickel, and dime in front of your kid and ask them which coin is more valuable. There is a 90% chance they’ll choose nickel because of its comparatively larger size.

Use this opportunity to tell your child that even with the smaller size, a dime holds more value among other coins because it is worth 10 cents.

  • Quarter: A quarter is worth 25 cents. The coin is larger than a nickel, and is made using cupronickel. It has George Washington on the front end, and a United States emblem on the opposite end. The backside of a quarter coin may also have one of the 50 states’ designs.

Other not so common coins include the Half Dollar and Golden Dollar coins! The best way to start teaching kids about money is to talk about money itself. Once your children understand coins, you can move towards talking about dollar bills.


2. Use a transparent glass jar to save money

A savings bank account is a great idea, but preschoolers won’t learn much using it. Instead, keep an empty glass jar in your kid’s room so they have something to observe daily. This is a good way to teach kids about money.

Give your children two coins each day (penny or nickel)—one to spend and one to save in the jar. As the days pass, teach them how saving a coin every day is filling up the jar slowly.

A few days ago, the jar was empty. But now, you are the owner of five dollars, big man! Show them the importance of saving, and how it can help in life.


3. Save Money, Buy Toy Activity

How to teach kids about money

One way or another, your little devil will make you buy their favorite toy or any item they eagerly desire. Why not teach a lesson doing it?

Tell your little boy or girl—they can easily get that cool water gun or pretty barbie doll set by saving their own money. This is a great way to show your kids that stuff costs money.

To do this activity, ask your kid to create a pretty label for their savings glass jar or piggy bank. Even better, if you can help them design a creative label (mention the item they wish to buy or Target: $10 or $20) and decorate the jar, as it will motivate your kids to save money.

Next, when they have enough money to buy their desired item, let them take you to the store and pay the cash by their own hands. This simple activity will teach them one of the most important lessons in life—saving money.

Moreover, it will save you from random Walmart tantrums by asserting independence in your kids from an early age.


4. Home Stores

When it comes to teaching kids about money, the Home Stores activity is one fantastic approach. For this activity, you’ll need:

  • A Nutella Jar; you need to get small cups for servings.
  • Prepare different-flavored shakes; smaller glasses for servings.
  • Chips; crush them in smaller pieces
  • White sheets; kids have to draw their own money for purchasing items.
  • All your kid’s friends!

Note: Make sure you’re involving your kids in behind-the-scenes hard work; allow them to create lovely memories that they’ll remember a lifetime.

Now, work hand-in-hand and build a store-like structure using spare cardboards and some water color. Put the tasty items in smaller cups and glasses, ready to sell in the home stores. Next, price the menu and ask the kids to draw their own money and pass by if they want to purchase anything.

Remind them to be specific about coins when buying, because the chips cost 35 cents and shakes go up to 65 cents. (lol, they will have to do so much hard work. On the bright side, they’ll learn math, money management, and smart expenditure)


Teaching Elementary Schoolers about Money (Ages 7 to 13)

When your kid starts their elementary school, they begin to acquire a higher level of education. This makes you (as a parent) responsible for continuing their financial literacy!

5. Prepare separate house-hold shopping lists

When you’re creating a monthly shopping budget, allot money limits to your children and let them make their seperate Walmart lists. Tell them to note down all their home and school essentials, household necessities, food items, toys, bathroom accessories, and everything they need in daily life.

Children usually overlook the importance of daily-life necessities by taking them for granted. This is why, when they grow up it becomes difficult to manage day-to-day expenses and live a normal life.

Making your kids take small monetary decisions will:

  • Build their confidence
  • Allow them to feel independent
  • Teach them budgeting
  • Show why money is important

6. Set a Monthly or Daily Allowance

Make teaching about money fun by Giving your children consistent allowances can help them develop financial skills, and have first-hand experience at handling money. Monthly allowances enable kids to make money-conscious decisions, which will set them up for future financial management!

Benefits of teaching kids about money using allowances:

  • If allowances are tied to house-hold chores, it will teach your kids about the paramount relationship between work and money.
  • It allows them to save money for non-essential things like video games, toys, candies and chocolates.
  • Kids feel completely independent when making purchases; this makes them take responsibility in both rich and poor financial decisions.

Use money to build a reward system for your kids. If they get good grades, achieve a special skill, or just willingly help in chores, award them with money.


7. Lesson: Opportunity Cost

In simpler terms, opportunity cost means choosing between two items, keeping your needs and budget in mind. For example, when your boy has to make a choice between buying his favorite sneakers and a remote-control car.

At this age, your kids must learn to take authority and make smart decisions. Opportunity cost will teach him whether it is important to get a new pair of shoes, or whether it is better to run around the house with his fast car!


8. Importance of Donations

As soon as your kid starts making or saving little money, ensure you teach them about giving. Show them how there are beings that are more needy than them, and how buying food for the poor may feel better than getting a toy car (that’ll probably break in a week).

They can choose to be generous in their own ways—feed a hungry dog, buy candies for a poor kid, donate to charity, help a friend, etc. Slowly, your kids will learn that true happiness is shared, not bought.


9. Why is Impulse Buying a Poor Decision?

Are you tired of your children literally screaming like crazy for items they place their eyes on? “MAMAAAA, I want that cute barbie dress. It looks lovely; can we please buy it?”

Well, who isn’t? The only way to save yourself from these dinosaur screams is by asking your kid to buy random-craving items themselves. Tell them they can use their saved money or chore commision to get it. However, they need to wait a day or two before buying so they are sure about their decision!

When you get your kid to wait before purchasing things, you allow them time to rethink if they really wanted that dress. Doing this, you will prevent your preteens from making impulsive monetary decisions and help them choose wisely!


10. Relationship with Money

Children learn from their surroundings (mostly from parents), and develop skills from everything they observe. If you’re constantly over spending and being stressed about money, there’s a higher chance your kids will pick it up.

They’ll assume that money is something stressful, and it causes you to worry all the time. The way you handle your finances will mirror your kids’ actions towards money; aka your relationship with dollars equals to your kids’ relationship with dollars.

Here, you have an opportunity to lead your kids towards financial literacy by making wiser monetary decisions yourself:

  • If you budget every month, they’ll learn the same.
  • If you resist impulse buying, they’ll start giving second thought to their random cravings.
  • If you save money in your bank account, they’ll save money in their glass jars.
  • If you manage expenses smartly, your kids won’t fear money in the future.


Teaching Teenagers about Money

Being the upcoming generation, there is nothing as dangerous as a financially illiterate youth. If the teens aren’t aware how to manage their finances, they can unknowingly fall into various monetary traps; some of which take years to get out of.

This is why teaching kids about money at their teen age is the most crucial step to a bright country’s future. Here are some easy tips to follow:


11. Part-time work or Small Biz Ideas

When kids make their own money, they learn how to use it wisely. They’ll be more thoughtful towards expenditure, because they have to work hard for little money! This makes money management for kids easier.

There are many ways for teens to make money doing part-time work:

  • Doing household chores for reward money
  • Mowing the lawn for you, family members, relatives or neighbors
  • Babysitting
  • Cleaning cars
  • Cleaning house and selling old items at wasteyards
  • Doing minor jobs for close people, like preparing a school project or writing an assignment
  • Looking after pets or taking them out for walks
  • Opening a cold drink stand in Summer holidays 
  • Working as part-timer at a theater or restaurants

Allow your kids to make their own money doing small jobs and part-time work; these first-hand experiences will surely teach them more than an hour-long lecture!

12. Bank Accounts

As soon as your kid is in their teen age and making their own money, they don’t need a savings jar anymore. Instead, you should get them to open up three zero-maintenance bank accounts for saving, spending, and giving respectively! Doing this will greatly impact your kids finance positively.

Some great checking & savings accounts for teens in 2022: 


13. Teach them Budgeting

When your child has their first wage, they’ll probably want to spend it all doing or buying something unuseful. This is your opportunity to teach them how they can budget their whole month or use their income to do something better.

Start by dividing the income into 70/20/10 budgeting—where your child may use 70% for needs and wants, save 20% in account, and give away 10% in charity.

14. Talk about Delayed Gratification

Save your children from future financial debts by helping them learn about delayed gratification, and understand the difference between needs and wants.

For that reason, you yourself have to practice delayed gratification with teens and refrain from buying things you want vs what you actually need.

You must make sure you don’t indirectly show that their wants do not matter, or they are annoying and assertive. You need to be subtle when logically denying your teen’s strong urge to buy something they like!

For instance, if their local friend shows off a new remote-control helicopter or a brand new tech gadget, making your teen to desire the same, politely ask them to wait until next week or even next month! If what your kid desires is a want, make them contribute their own money in making the purchase.

This way, your teen would ask himself, “Is this helicopter important enough for me to spend my hard-earned money on it?” As the week or month passes, and your teen has to spend their own money for an unimportant item, 90% chances are the desire will likely fade.

In 10% chances, if they do really buy their desired thing, you will be surprised how well they take care of it (just because they put their own money in it). 


15. Spend less than you earn

There’s an old saying, you should spread your legs as long as the blanket is; otherwise, you will feel cold.

Ask your teen to be mindful about their income and expenditure, and always try to spend less than they earn. This way they’ll save extra money every month, which will prove useful later for unexpected circumstances or even buying something expensive like their dream videogame or paying for a school trip!

If your kid successfully starts saving some portion of their money every month, you’ve taught them how to get out of life’s most difficult rut.


16. Credit Scores

As your teen ages towards becoming an adult, they may soon be offered to open up a credit card by their bank. Even with smaller credit limits, your teen can get over excited and misuse this opportunity.

They might blow up the limit, start making late or minimum payments, and keep high balances on their account. It’s your job as a parent to teach them about the goods and bads of credit, how credit score works, and how to maintain a good relationship with finances.
Talk about the benefits of good credit:

  • A good credit will help them finance a car at lower interest, when their age arrives to drive a four-wheeler.
  • It will help get their own apartment when they are ready to live independently.
  • A higher credit score improves the chances of loan approvals
  • It helps save money on utilities

Tell them how easily a credit report can downfall, and how long it takes to correct your financial mistakes!



It is important for every parent to learn how to teach kids about money as this helps the kids to make better financial choices and decisions.

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