If you want to know how to teach kids about money and saving from an early age, you’re already doing something amazing for your child’s future. I grew up with little financial education — my parents meant well but didn’t talk much about money. When I became a parent myself, I promised I’d do it differently.
In this guide, I’ll share exactly how I teach my own kids about money, saving, spending wisely, and even basic investing — using age-appropriate tips and real-life habits that stick.
Why Teaching Kids About Money Early Matters
Many adults struggle with money because they never learned the basics as kids. Schools rarely teach it, so it falls on us as parents. When kids understand saving, budgeting, and spending early, they build healthy habits for life — and avoid painful mistakes later.
Learning how to teach kids about money and saving from an early age is about keeping it simple, fun, and practical.
Step 1: Start with the Basics — Where Money Comes From
Small kids think money just “comes from the card” or “the ATM.” I started by explaining that money is something we earn by working.
Simple ways to show this:
✅ Let kids “earn” a small amount for chores.
✅ Talk openly about how you work to pay for things.
✅ Take them to the store and explain why you choose certain items.
Step 2: Give an Allowance — With a Purpose
Giving an allowance isn’t about “free money.” It’s a teaching tool. I started giving my kids a small weekly allowance once they were around 6.
Rule: It’s tied to simple tasks like feeding the dog or helping set the table — not grades or big family contributions.
This teaches the link between effort and reward.
Step 3: Teach the Save-Spend-Give Rule
When my kids got their first allowance, they wanted to spend it all on candy. So we made three jars:
1️⃣ Save — for bigger goals like a toy.
2️⃣ Spend — for small treats.
3️⃣ Give — to share with someone in need.
Seeing the money grow in the “Save” jar made them excited about waiting for bigger rewards.
Step 4: Take Kids Shopping — and Let Them Make Decisions
One of the best lessons happens in the store. Give your child a small amount and let them choose how to spend it — even if it’s “wasted” on a cheap toy.
Later, when it breaks, they learn about value. Talk about prices, sales, and needs vs. wants. It sticks better than any lecture.
Step 5: Use Clear Goals for Bigger Savings
When my daughter wanted a $40 art set, we turned it into a goal. She saved part of her allowance each week, tracked her progress on a chart, and finally bought it herself.
Kids love visuals — use a goal chart, sticker chart, or piggy bank they can see fill up.
Step 6: Talk About Digital Money Too
Kids see us tap cards and phones — cash means less and less. I explain that the card is just a tool to use the money we already have — not magic money.
For older kids, try an app or prepaid debit card for kids with parental controls. They learn about balance and spending safely.
Step 7: Be Honest About Money Mistakes
When appropriate, share age-appropriate stories about money mistakes you made — and what you learned. It shows kids that mistakes happen, but smart habits fix them.
Step 8: Model Good Habits
Kids watch what we do more than what we say. Show them:
✅ You save money for goals.
✅ You compare prices.
✅ You don’t buy everything you want right now.
✅ You talk about a family budget openly.
This normalizes money as a healthy topic — not taboo.
Mistakes I Made (So You Don’t Have To)
❌ Avoiding money talks because it felt “too adult.”
❌ Using allowance as a punishment or bribe for good grades.
❌ Not letting kids make mistakes — small spending fails teach big lessons safely.
Real Example: How My Kids Learned to Save
At age 8, my son wanted a gaming console. Instead of buying it for his birthday, we split the cost:
- He saved allowance and birthday money for 6 months.
- We matched what he saved.
- He took care of the console like a treasure — because he’d worked for it.
Now, saving is a habit, not a chore.
FAQs
1. When should I start teaching kids about money?
Start simple conversations as young as 3–5. Give small allowances with guidance around age 6–7.
2. Should kids earn money for chores?
Light chores can connect money with effort. Bigger family responsibilities should still be expected without pay.
3. How much allowance is right?
There’s no magic number — $1 per year of age per week is a common rule (e.g., $7/week for a 7-year-old).
4. Should kids get a debit card?
Older kids and teens can benefit from a prepaid debit card with parental controls to learn how digital money works.
Final Thoughts: Small Lessons, Lifelong Rewards
Learning how to teach kids about money and saving from an early age doesn’t require a finance degree. It just needs simple, everyday conversations, age-appropriate lessons, and consistency.
Start small, make it fun, and watch your kids grow up with money smarts many adults wish they had.