Do you remember learning about money as a kid? Chances are those lessons have stuck with you through the years. What kids learn about spending and saving can last a lifetime. Smart money habits can play a role in their success as an adult—helping them reach goals and achieve dreams.
Want to teach your kids to be smart about money? You’re in the right place.
That’s right, learning about money starts at preschool age. Kids pick up a lot by watching and listening to parents and caregivers. So go ahead and start talking to your kids about spending and saving as soon as age 3.
Here are 3 lessons to focus on, along with some fun activities.
1. what is money?
Introduce young ones to the idea of money. Show them coins and cash and explain how much they’re worth. Once kids understand value, you can give examples of exchanging money for things, like toys, food and clothes.
Help your kids understand why we need money and how we use it almost every day. It’s easy to find opportunities to talk about money as you go about everyday life. For example, at the grocery store you can bring cash and explain how you’re paying for food. Then, you can show them the receipt and point out how much each item cost.
activities
sorting coins
Sorting coins is fun for young learners.1 Ask them to divide pennies, nickels, dimes and quarters into piles and teach them the names. Try a few games. See how many quarters they can stack before they topple over. Have them role a die and then stack that number of pennies.
play money
Invite your kids to make their own play money. All you need is paper, scissors and crayons or markers. You could draw rectangles or circles to get them started.2
pretend restaurant
Your kids will love using their play money or pennies at a pretend restaurant at home. Choose a name for the restaurant and help them make a sign. Set aside some snacks and drinks. Take turns playing server and customer.
2. earning money
Kids may soon ask where money comes from. How do we get it? This is a great time to explain working and jobs. Pretty soon, your kids will understand the connection between working and money.
activities
talk about work
Describe favorite jobs you’ve had and what you loved about them.3 Discuss what other family members and friends do to earn money. Describe what other people do for a living, beginning with adults they see all the time, like preschool teachers, librarians or mail carriers.
around the neighborhood
When you’re out and about, point out all the people working. You might see delivery drivers, construction workers, bus drivers, bank tellers or cashiers.3
dream jobs
Ask your kids to imagine the most wonderful jobs, practical or make believe. Help them come up with ideas. Lost pet finder? Unicorn racer? Donut baker and taster? Toymaker? Butterfly rescuer? Turn up the creativity and ask them to draw their dream jobs.
3. saving
Saving money is one of those positive habits that can last into adulthood. Show your kids how setting aside money can help them reach short-term goals, like buying something special. Tell them why it feels good to save for the future. Keep the conversation going as kids grow up.
activities
DIY piggy bank
Get crafty. Help your kids make their own piggy bank from an old jar, a plastic bottle, can or cereal box. And if pigs aren’t their thing, let them choose something else: a kitty cat, puppy, ladybug, airplane or anything that makes them happy.4
hide, seek and save game
Hide coins around the house, then have your kids find as many as they can. After a few rounds, count the money together and talk about what it could buy. Discuss how they could buy something small today or save up for another time.
By this age, kids will understand the basics of money and what it can buy. These next 3 lessons give insight into making smart money decisions. Try some activities, too.
1. understanding the value of money
It’s difficult to truly understand the value of money until you’re earning it. And once kids are earning their own money, they can gain real-world experience with spending and saving.
If you can afford it, an allowance can be a great learning tool for kids. They can start setting goals and saving.5 You could give a fixed allowance each week, no matter how many chores are accomplished. Or you can give an allowance in exchange for tasks, like washing dishes.
Here are some more ways to drive home the value of money.
activities
chore chart
Invite kids to earn money by doing chores. Create a chart of tasks and what each one pays.
talk costs
It’s a good idea for kids to understand how much things cost. Show them receipts. Have honest discussions about the price for toys, clothes, shoes and other everyday things.
find ways to earn
Selling lemonade on a hot day is still a summer tradition. Maybe kids have their own ideas for earning money. Selling homemade cookies to neighbors? Weeding a flower bed for Grandma? Your little entrepreneur may grow up to run their own business.
2. setting goals
Know any kids who have a long list of things they want? I bet you do. If they’re earning money, they may want to spend it. You can help them set up a plan to buy the things they want. Focus on one item on their list at a time. Which thing is most important to them? Make sure their goal is realistic. Then discuss how they can save up to achieve their goal.
activities
make a plan
Help your kids write down the steps they need to take in order to buy something special. Set a deadline and track their progress together. Remember to cheer them on and celebrate when their goal is achieved.6
savings match
Encourage saving by offering a match. For example, if they save one dollar, you could give them fifty cents.7
games
Play money-based board games if you have them. Or look online for other options.
3. making smart spending choices
Ever bought something irresistible in the moment and regretted it later? Seriously, who hasn’t done that? Everyone makes mistakes with money. At this age, kids can start learning how to be patient, avoid impulse shopping and make wise spending decisions. Go ahead and share your hard-won wisdom. Start including kids in family discussions about budgets and saving. Try to keep the tone upbeat and positive.
activities
needs vs. wants
Talk to kids about the difference between things you need and things you want. Then try this fun activity. Find 2 pieces of paper. Write “needs” on one and “wants” on the other. Ask kids to write down items for each category. Make it more fun by having them draw pictures. If you have old magazines or catalogs, ask kids to cut out pictures and glue or tape them to the page that best represents the item. Discuss their choices.
shopping lists
Before heading to the store, ask them to help you make a list. Show them how sticking to the shopping list can help you avoid overspending or impulse buys.6
share stories
Talk to kids about any mistakes you may have made with money. Explain what you learned from those experiences.6
It’s easy to incorporate money lessons into everyday life. You might be surprised to discover all the teachable moments that come up regularly. With your guidance, kids can develop smart money habits and skills for a healthy financial future.
1 https://files.consumerfinance.gov/f/documents/cfpb_parents_money-sort-activity.pdf
2 https://files.consumerfinance.gov/f/documents/cfpb_parents_pretend-play-activity.pdf
3 https://www.consumerfinance.gov/consumer-tools/money-as-you-grow/young-children/explore-earning/
4 https://www.consumerfinance.gov/consumer-tools/money-as-you-grow/young-children/explore-saving/
6 https://www.consumerfinance.gov/consumer-tools/money-as-you-grow/school-age-children-preteens/explore-planning/
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