Teaching your child about money (2024)

FAQs

What is the best age to teach kids about money? ›

Teaching children about money management is essential in order to help them understand the value of money and equip them with the skills needed to manage it responsibly. Starting at 5 to 7 years old is a great way to begin developing their understanding of money management.

Teaching children about money equips them with the knowledge and skills they need to manage their money effectively now and in the future. Children who do better with money tend to have parents/carers who talk to them about money and give them responsibility for spending and saving from an early age.

It's always important to remember that kids develop at different rates, and you'll know best when to teach your child to count money. However, as a rough guideline, children can start learning to count money shortly after they start learning to count in general. This could be around age 4.

It's important for kids to learn about how to manage their money before they are teens out and about without you. Giving kids pocket money when they are young helps them to slowly build financial skills so that they are savvy about spending and saving when they naturally become more independent.

Skip-counting is where you count by multiples of 5s or 10s or 20s. It is a simple way for your child to count bills and coins of most U.S. denominations. Continue practicing skip-counting with your child until they can skip-count all coin values up to one dollar and 100 by 5s,10s, and 20s.

Throughout pre-kindergarten, kindergarten and grade 1, your child will learn how to count coins and typically know how to count money before they enter third grade.

Kids between the ages of 6 and 8 may start to understand how money works. "As soon as your child is receiving an allowance, he'll need a place to put his money," says Pearl. Make a trip to the bank an event. Help your child open a savings account, and encourage them to make regular deposits.

Another great way to teach your children about money is by including them when paying bills or discussing large purchases. Family financial meetings can be a way of teaching children about the financial choices you make and why you make them. Depending on the age of the children, try to put it in terms they understand.

The Beginning: Age 5 or 6

Introduce allowance when you think your child is ready, which is usually around age 5 or 6. The age will differ for every child, so don't force the issue if he's clearly not ready.

How to start learning about money? ›

Talk to professionals, such as financial advisors, bankers, accountants, and attorneys. They are often happy to share their general knowledge with those just starting out, especially if you show a keen interest in learning more.

Having less money for clothes, toys, and activities can interfere with the sense of “togetherness” that makes kids feel connected to their peers. Kids with fewer possessions might feel embarrassed or worry about being teased, said Amanda J.

He recommends teaching five- to eight-year-olds “very, very basic things” like that money has value and how choices made with it have an impact. For eight to 12-year-olds topics can be more complex, Landolt believes. “You can talk about the different types or uses of money.

Early Years (Ages 3-6)

Here's how parents can start teaching saving habits to kids 3-6 years-old: Use visual aids. Introduce piggy banks or clear jars so children can physically see their money grow. Let them decorate their own piggy bank to create a sense of ownership.

Ages 5-8 (Early Elementary)

At this age, children are now starting to understand what money is – and its value. Money moves through our economy every day, but start with recognizing it in your community – from your neighbors, local banks, grocery stores, and shops.

One key short-term goal to plan for is the need for an emergency fund. According to Bankrate, your emergency fund should equal three to six months of bills. CNN Money suggests that you start saving for long-term retirement goals in your 20s, as soon as you leave school.

By around five and six, children are starting to understand and question money-related basics. They'll be able to understand that: different coins have different values.