Financial Education for Kids: Top 10 Tricks

Financial Education for Kids: Top 10 Tricks
Written by Irina Vasilescu

If there’s one skill that parents need to teach their kids at home, it is none other than saving money. Although school age kids will eventually develop mathematical skills with the help of their teachers, personal finance management is not really a part of their academics.

Once your kids are old enough to venture out on their own, you would not want them to be clueless on how to manage their finances – so they need to start getting trained for it as early as possible, and the best setting is your home.

In the US, less than half of the states have subjects dealing with financial literacy for K-12 education systems. There are only four states where high school students are required to take personal finance classes, so it really is up to the parents to do the training. The problem is that many adults consider money to be a taboo subject.

Most parents are not confident with their own money management skills, so how can they pass off the knowledge to their children? The good news is that you do not need to be a financial expert in order to give your kids that foundational knowledge on handling money. You can take little steps that will lead them to realize the value of saving, spending and giving. You can also involve them in money-related decisions which you can all make as a family. Doing so, you can teach them the basics of how to save money.

Financial Education for Kids: Here’s What They Should Know!

As a parent, you need to make use of age-appropriate exercises when teaching your kids how to save money. Take a look at the top ten ways on how you can teach kids the value of saving:

1. Start teaching them about money as early as possible.

If you have a kid who loves Legos, every trip to the toy store would involve tantrums, coaxing and pleads for you to buy him or her a new set. You might feel as if not buying that toy set for your child makes you a bad parent, but there are plenty of other bills that you need to pay for. This means that you should teach your kids the value of waiting before buying something that they want. As a grown-up, this is a skill that you may have learned the hard way.

But now that you’re a parent who is teaching your child how to save money, you can encourage them to save up for something that they really want.

If your five-year-old son wants a new Lego set, for example, you can teach him to save up for it and you can simply match or fill up the funds later on. You can have him save pennies on a jar and label it “To buy a new Lego set”. You can even pay your child to do age-appropriate chores, which will put him on the right path of learning how to work hard for what he wants. At the same time, you are teaching him about the value of saving.

2. Repurpose jars to use as a coin bank.

You can have a collective jar in the house for all the kids, or make them create their own saving jars. The purpose for saving up on each jar should be clear – one could be for saving, one for spending and one for sharing. Every time your kids receive money, they can divide the funds equally among the jars. It is important to set a specific goal so that your kids will be even more motivated to add funds to each saving jar.

3. For kids aged 6 to 8, you can open a bank account and turn the task into a major event.

Once your kid reaches the age of six to eight years old, the money-saving skills that you trained him or her to have should be evident. By now, you can add more serious money management skills and what you can do is make en event out of opening a bank account for them.

When your son receives money from his grandmother for his birthday, or if your daughter has extra funds from selling cookies as a Girl Scout, you can put the money onto the bank account under their name. This is also a good time to encourage them to contribute to their own college fund.

4. For older kids, give them an allowance.

Older kids can start learning how to manage their own money if you will give them an allowance. It can be weekly or daily – what’s important is to set an amount that is not too little or too much. If your daughter wants to buy a new fashion item which other kids also have, tell her to save a portion of her allowance for it. You can also get your kid started on making a weekly or daily budget and prioritizing what needs to be saved up for or spent on.

5. Offer a reward for saving money.

How can you encourage your kids to save money? By offering a reward to save money!

If your son wants to buy a gadget or a toy, for instance, you can tell him that you will match every dollar that he can save from his own allowance. He can also find extra age-appropriate chores to do at home which you can pay him for, so that it will add to his funds for the purchase. You can also offer to buy the toy using your own money once his savings reach a certain amount.

6. Match the contribution of your child.

As mentioned earlier, the best encouragement for kids to save money is by offering a reward for the deed. You can match the contribution of your child for a saving or spending fund, to make it easier to come up with the amount.

7. Use fun apps and games to teach kids the value of saving money.

On tablet computers or mobile phones, you can download apps that will teach kids the value of saving money. P2K Money is an app available for iOS devices which kids can use as a budgeting sand savings tool. They can have a wish list for tracking savings goals, and they can also keep track of incomes like payments or allowances. Games like “Save! The Game” are apps that teach children the difference between needs and wants.

The virtual fantasy game requires kids to collect money and avoid losing their savings to items that belong to the wants category. There are also other apps that teach kids how to budget, apps that work like a virtual coin bank and similar applications that train them how to manage their finances better.

8. Teach kids the value of comparison shopping.

Take your kids to the grocery store and teach them the value of comparison shopping. If you are looking for a detergent soap for doing the laundry, ask your daughter to check on the prices of three different brands of soap. Which one does she think will give you the best value for your money?

While doing such seemingly mundane chores, you are actually teaching her about the importance of comparison shopping, a skill that she can definitely use when she grows up.

9. Make them work for what they want.

Kids who are fortunate enough to have well-off parents think that money is easy to come by. Even if you are earning more than what your family financially needs, there is still a need for you to teach your kids how to work hard for what they want. This is definitely a skill that they can use once they venture out on their own. You can start off with things like small toys or gadgets.

Instead of buying it for them immediately, you can make them work for it through extra household chores which are age appropriate. You can even teach your kids how to become an entrepreneur by helping them bake cookies or craft goods which can be sold for a profit. When you’re spring cleaning, they can sort out their own stuff which they are not using anymore – and have them sold at a garage sale.

10. Aside from teaching kids about the value of saving, also stress the importance of spending and giving.

Finally, more than teaching your kids about the value of saving and spending, let them know about the importance of giving as well. If you have three jars where coins and small bills are collected, make sure that there is one for giving or sharing to others.

By teaching your kids the value of saving money as early as possible, you can rest assured that they can handle their own finances in the future. Once your son or daughter is ready to leave the nest, these money-saving skills will definitely come in handy.

About the author

Irina Vasilescu

Irina Vasilescu is our crafty designer. She joined the team three years ago and is also involved in the writing process.


  • I really liked saving money when I was a kid. I rarely bought things and hoarded all of my money away 🙂 My parents got me a play checkbook and taught me how to balance it. I was so excited when I finally started working and opened my own bank account. It set me up to be financially responsible as an adult.

    • Haha, I had the exact opposite experience as a child. I was given money by my grandparents without any real obligation and just blew through it at my whim. It instilled a pretty wasteful mentality in me for a long time until I started living on my own and realized that money finds a way to disappear realllllly easily.

      After a few hard lessons, I think I’ve figured out that a strong budget and a tight wallet make more sense than the other way around.

  • At an early age, I remember my single parent mom instilling the importance in me when it comes to saving money. I was such a saver back then too compared to now and I still question what happened why I can’t do it anymore. Is it bills or circumstances that just keep coming up and putting off that old habit of mine? Nonetheless, my mom’s teachings combined with math knowledge at school that I was good at picking up at, helped me know how to manage my finances on my own. Haven’t been perfect managing it but I’ll get better once I clear up some financial setbacks.

  • This is a topic close to my heart. There does seem to be a bit of an entitlement culture amongst kids today (and has spilled into the twenty-something space). I don’t want to sound like a “things were better in my day” type of person, because there are a lot of similarities. But I do think that kids have a poorer appreciation of money for whatever reason.

    The fact that the schooling system doesn’t mandate personal finance teaching at a young age is scandalous. None other than former Fed Chairman Ben Bernanke said fairly recently that to avoid another financial crisis on the scale of the last one we need to start educating our kids about personal finance dynamics. Obviously, some of that teaching starts at home.

    Unfortunately, a lot of parents don’t want to have the conversations because they don’t understand it themselves or are scared they will provide bad advice. They were probably big users and losers in the explosion of consumer credit. So while I really like the crux of the article, the one thing I would add is that parents need to read up on personal finance as well before teaching their kids. After all, the parents are a reference point in terms of their actions for the kids.

    • We had a finance section for our career and personal planning curriculum in high school here.. .and honestly it was mostly lost on the students. When you’re a teen, nebulous ideas like interest, taxes and budgets don’t hold any appeal, and even less immediate impact.

      It’s difficult to instill the idea that these concepts form the core of your financial foundation, and that without at least a working understanding of them your life can be made rather difficult.

  • This is a great piece of information for adults with children. We cannot ever expect children to understand the value of a dollar if we do not teach them how important it is to be prepared for life’s expenses. Teaching children to save at an early age will benefit that child throughout their life. Definitely worth doing.

  • This is a good article. There are many children that fall into financial havoc when they become adults because they were not taught at an early age about how to deal with money. Like the article says, teach them early. I grew up not knowing all that much about money, and could have definitely benefited from some gentle but intense financial training when I was a child.

  • I wish that my parents were better about teaching me any sort of fiscal responsibility when I was a child. The lack of those skills ended up setting me back quite a bit through my young adulthood which I’m only just managing to recover from.

    That being said, these are great tips that I intend on utilizing. Specifically, I want to ingrain a good sense of achievement for buying items. Spoiling children with gifts is something I want to avoid because it can really erode the confidence and inherent sense of accomplishment earning your own things can provide.

  • These are all good ideas and sadly most of them I did not do with my children. Number nine is the closest because they get money for A’s. My daughter has a lot of extracurricular activities that require her to be gone until evening most days and my youngest, well, he’s a boy and it’s hard to keep him on task. Although, he does help out around the house when I tell him to.

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