Teaching kids about money now
will shape responsible adults.

Teaching kids about money now is crucial if they are to turn into responsible adults. Money management for kids is different at different ages because they understand more or less, and they have more or less disposable dollars. Still, there are teachable moments at any age:


At this age, 4 or 5 year olds may or may not be ready for allowance, but they can still learn the value of money.

Learn to say no

We've all seen little kids who feel entitled to everything. Parents of these kids say they feel guilty for depriving their kids of any material thing. The truth is, these parents have an opportunity for teaching kids about money here, and so do you.

Give them a budget for certain things.

For holiday gift giving and birthdays, consider giving them a certain amount of money. In our family, we go to a discount store for sibling shopping, and let kids choose their gifts for each other. Calculating does take some parent support, but it is a great way to teach kids about money.

Another thing we do during the holiday season is give to our local Food Bank. I know this should probably be a year round thing, but I never seem to think of it until I see those big boxes in our grocery store. I give each of my kids a certain dollar amount in cash, and then we shop for the Food Bank. They can buy whatever they want, and they usually buy anything from peanut butter to Lucky Charms.

School aged kids:

Let them buy stuff with their allowance

Kids will understand the value of money only if they get the chance to spend it. Saving is great, but expecting your child to embrace the “delayed gratification” thing may not be developmentally appropriate just yet.

Implement the “spend/save/charity” rule

I learned about this idea from a friend, so we don't actually do it. The idea is to set the habit of saving and giving when they get their allowance. They divide their allowance into thirds, and put each amount into a separate container.

Let them spend some of their allowance on buying back their confiscated stuff

When your kids forget to pick up their toys, consider guarding them in a penalty box (the toys, not the kids!) This is a tremendous incentive for kids to put their things away.


Give them a credit card with some strings.

When I turned 16, my mom gave me a credit card on her account. She made me sign a contract, which was irritating (insert teenage eye-rolling here), but I did get accustomed to buying what I knew I could pay off each month.

Teaching kids about money is a natural extension of raising responsible kids. Whether you have a preschooler or a teenager, let kids make money and lose money now while it's a relatively safe lesson.

Go to Allowance from Teaching Kids About Money