How to Raise Money-Smart Kids

For some parents, talking to their kids about money is almost as difficult as discussing the birds and the bees. Don’t be one of those parents! Talking to your kids about money should basically be a series of easy, simple and straightforward conversations that you have throughout their lives. No pressure, right?

Early Elementary

Before age 7 or 8, you’ll want to teach your children money basics. That means explaining what the different coins and bills are worth. There are many online games and mobile apps to help with this. You’ll also want to start going over what things cost – the grocery store is a great place to start with this lesson. Show them price tags and explain how many dollars, quarters, dimes, nickels and pennies it costs.

Ages 7-9

Around second or third grade you’ll want to go beyond the basics. Get your children involved with daily financial decisions. Again, the grocery store is a great starting point. Let them know what your grocery budget is for your next shopping trip and put a list together of what you need. Show them how you stay within your budget, even excluding the luxuries like ice cream or chips if you can’t afford them this trip. Check out the store’s flyers and websites/apps to determine costs.

This is also the age you might want to consider starting an allowance. General rule of thumb is a dollar for each year of their age. So, if they’re 8, they’ll get $8. Whether that’s per week is up to you and should also depend on what they’ll be doing to earn their allowance. Normal chores like making their beds each day or doing their dishes shouldn’t be included. But extra cleaning or yard work are all good ways to show them how they can earn money for the work they do – just like a grown-up!

Ages 10-13

Around fifth or sixth grade you can take the financial education up a notch and start including goals and the three jars approach. Each allowance or gift of birthday/holiday money they get starts getting divided into three categories: save, spend and give. This will teach them about giving back to their communities and those less fortunate, as well as delayed gratification. The latter is something all kids – and many adults – need help learning!

Work with them to decide how much to put in each “jar,” which could be an actual jar, envelopes or accounts at your credit union. The most should go into the save jar, with a smaller portion going to the give jar and even smaller portion to the spend jar. Help them determine a savings goal like a new toy, book, game or even an upcoming event or movie they’re interested in attending. Either use a notebook, spreadsheet or mobile app so they can track their progress in reaching their goal.


The older children get, their needs and wants usually become more expensive. The teen years are the ideal time to start showing them how to create personal budgets, use a checkbook register (or other way of tracking their income and expenses) and the pros and cons of borrowing money.

If your older teen has a job, help them track how much income is really coming in and if/when they can buy things they need like clothes, a tank of gas, video games or a movie with friends. You could even have them start helping with school-related expenses like sports fees, field trips, etc. Guide them through budget-related questions like whether it’s better to buy a single pair of expensive shoes versus two less expensive pairs. This is a great time to go over the value of items and how better-quality things usually cost more and are worth the money.

If they are looking to purchase something they can’t afford, you could lend them the money. Attach some form of interest, whether it’s actual money or an alternate option like doing extra chores around the house. Figure out the terms of the loan like the interest and amount of time they have to pay you back – as well as the ramifications if they don’t. Again, this could be monetary or task-related. As they age, you can step it up even more and get into the nitty gritty of auto loans, mortgages and credit cards.

Make it Fun

Finally, make learning fun! There are dozens of mobile apps out there that feel like games but are designed to help your children learn. Also, don’t forget the oldie but goodie … Monopoly. It’s a great lesson in saving, earning, owning and mortgaging property and even income taxes! Here are a few apps you might want to check out:

  • Coin Junior (Google Play)
  • Kidsbank (Google Play and App Store)
  • Count Money (Google Play and App Store)
  • Cha-Ching Challenge (Google Play and App Store)
  • Pennybox (App Store)

Let your children help guide what they need or want to learn and give them plenty of room to ask questions. This enables you to get a feel of what they actually already know and where to go from there. If you have some financial questions of your own, don’t forget to stop by our branch or call (734)721-5700.

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