The Importance of Teaching Kids About Money (With Tips and Games) - Baby Chick
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The Importance of Teaching Kids About Money (With Tips and Games)

Explore tips for teaching kids in different age groups about money, along with simple games and activities that can be helpful.

Updated April 19, 2024

by Meredith Rines

Accountant and Certified Financial Planner
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Did you know the majority of schools are no longer teaching money management?1 Long gone are the days of learning how to balance a checkbook, avoid credit card debt, write a check, and pay bills. Parents now have to teach their kids about money, and knowing where to start can be tough. But we must do so — and do it early.

It’s never too early to talk about money with our kids. We need to teach them how money works, how to save, how to manage money, and other good habits with their finances. This can help them have a healthier relationship with their personal finances and a more stable future.

The Importance of Teaching Kids About Money

Children should understand what money is, how it works, and how to earn more of it. The first step in teaching your kids about money is becoming more open about it. You need to be an example for your child — and to do that, you must be willing to talk about money. You don’t necessarily have to break down your mortgage payment each month with them, but having kids understand the basics of exchanging money for a new toy is an excellent start for fostering healthy money habits.

How to Teach Kids About Money

Teaching kids about money is actually pretty easy — no matter their age. You may not know where to start, so we’re providing some basic money strategies your kids can be learning right now:

2-3 Years Old

When your toddler is still pretty young, you can spend this time introducing them to money. You may be thinking this is too complex for a toddler to grasp, but there are simple things you can do to get the conversation started. You can show them what money looks like, mainly play coins and bills, and start explaining the names and values of each.

4-6 Years Old

Have them start helping at the grocery store, and use this time to show them how to pay for something. Teach them to read price labels, hand the cash to the cashier to purchase your items, and swipe your credit card. Explain what you’re doing and why you’re doing it so they can start to get an idea of how payment works.

7-9 Years Old

They are now at the age when they can understand how bank accounts work.2,3 Make a trip to the bank and have your child open a savings account. You will have to sign for it, but have them go through the process. Teach them how to deposit the money from their piggy bank into their savings account by filling out a deposit slip.

10-12 Years Old

Often, kids believe they have to have a shiny new toy or game. However, when they reach age 10, it’s good to teach them how to spend their money on what they want. They can learn how to weigh the pros and cons of impulse shopping and save for something bigger later down the road.3

13-15 Years Old

You can teach them how to create a budget for themselves at this age.4,5 More than likely, they don’t necessarily need a budget right now, but they will shortly — especially as they’re learning to drive. You can create a simple budget based on what they could earn from an allowance by following the chores and calculating their weekly savings. Also, show them your family budget. Teach them how you manage it in order to buy their favorite snacks each week, their new shoes, and so on. Make it a learning experience to show them what a real budget looks like.

Now is also a good time to teach your child how to balance a checkbook, reconcile their spending from the bank statement, and write a check. These skills are no longer taught in most schools and are vital to being an adult. You can print off blank check templates online and have your child practice writing checks and then balancing their checkbook. You should also begin to teach your teen the basics of credit cards.

Games and Activities for Teaching Kids About Money

Here are age-appropriate games or activities that you can do with your child to increase their financial literacy and understanding:

2-3 Years Old

Lay out a penny, nickel, dime, quarter, and a dollar bill in front of your child. Let them play with them, but you will have to keep a close eye on them to prevent any swallowing! Teach them the names of each item and talk about money in simple terms.

4-6 Years Old

Play grocery store at home by pretending to shop and exchange money for imaginary items. Create a price for each item, and use only pennies to keep it simple. Your little one will have to read the price label, tell you how much the item costs, and count the money.

This is also a great age to introduce weekly chores.6 Instead of a set weekly allowance, give your child a chore list, and have each chore be worth a specific amount of money. Once they complete a chore, they mark it on their list. At the end of the week, they help you add up how much money they’ve earned. Of course, these chores need to be age-appropriate, but you can always change or add to them. Your child can then add their earnings to their piggy bank to learn about delayed gratification and how to save money.

7-9 Years Old

As part of the chores activity from earlier, now have your little one divide their weekly earnings into three categories:

  1. Save 10%
  2. Give 10%
  3. Spend the rest

Each month, go to the local bank with them to deposit their money from their weekly savings. This helps them learn how to allocate their money for different uses and teaches them to save.

10-12 Years Old

Sit down and create a goal for them — if they earn X dollars each week, they can save a set portion for that particular goal. After so many weeks, they can afford a new toy or something else they want. Create a savings jar (apart from their savings account) to illustrate how close they are to reaching their goal. They will visually see their hard work paying off and learn how to control the tempting impulse buy.

13-15 Years Old

Playing house isn’t just for the littles! A great way to teach your teen the idea of a budget, a checkbook, and money management is to play house. Give them a pretend starting budget of $5,000 and an empty checkbook and register. Then, they have to fill their house from an online store or catalog. They must “purchase” furniture for the entire home, clothes, food, and a car. This simple game will teach them how to manage their money so they have enough to go around and take care of all their tasks.

Teaching children about money doesn’t have to be complicated or stressful. Simply start introducing money to your little ones from an early age. As they grow, you can go more in-depth about money and how it works. The world of money management is much different today from 20 years, 10 years, and even five years ago. Technology has made managing your finances completely different, and that’s okay. As parents, we must teach our children the basics so they can be productive and independent later in life.

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  • Author
Meredith Rines, MBA, CFP®
Meredith Rines Accountant and Certified Financial Planner
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Wife, Mom, MBA, Certified Financial Planner, and a budget and financial strategist helping families pay off debt and live the life they've always wanted. Meredith resides in Missouri with her… Read more

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