37 Things to Teach Little Kids About Money

Teaching children about money from a young age equips them with the tools and knowledge they need to navigate the financial world with confidence. In this post, we explore 37 foundational concepts that will help your little ones develop a healthy relationship with money.

Why Financial Literacy Matters

Financial literacy is more than just understanding how to count money—it’s about instilling valuable life skills that empower children to make informed decisions about earning, saving, spending, and investing. By introducing these concepts early, we can prepare kids for a financially responsible future, helping them achieve their goals and build a secure financial foundation.

What to Teach Your Kids About Money

  1. Understanding Money
    • Concept: Explain what money is and why we use it. Show them different coins and bills, and discuss their value.
    • Example: Use play money to create a mock store at home. Let your child ‘buy’ toys or snacks using play money.
    • Why It’s Important: Understanding money’s purpose helps kids grasp its value in everyday life, laying the foundation for all future financial knowledge.
  2. Different Types of Money
    • Concept: Introduce the various forms of money, including physical cash and digital currency.
    • Example: Show your child how online purchases are made. Let them watch as you enter your card information for an online transaction.
    • Why It’s Important: Awareness of digital money prepares them for a future where digital transactions are common.
  3. Earning Money
    • Concept: Teach kids that money is earned through work.
    • Example: Assign age-appropriate chores like tidying up toys or helping with gardening. Reward them with small amounts of money.
    • Why It’s Important: Understanding the link between effort and earnings instills a strong work ethic and appreciation for money’s value.
  4. Saving Money
    • Concept: Show kids how to use a piggy bank or a savings jar.
    • Example: Give your child a piggy bank and explain that it’s a safe place for their money.
    • Why It’s Important: Learning to save teaches children patience and delayed gratification.
  5. Setting Savings Goals
    • Concept: Help kids set simple savings goals.
    • Example: Create a savings chart with your child. Let them draw or paste a picture of what they’re saving for.
    • Why It’s Important: Setting goals helps children understand the value of planning and working towards a target.
  6. Spending Wisely
    • Concept: Discuss the difference between needs and wants, and encourage them to think before making a purchase.
    • Example: During a shopping trip, ask your child to help decide which items to buy.
    • Why It’s Important: Understanding needs versus wants encourages mindful consumption and financial responsibility.
  7. Understanding Prices
    • Concept: Explain how items have different prices and how those prices determine what you can buy with your money.
    • Example: Play a ‘guess the price’ game at the store.
    • Why It’s Important: Recognizing the value of items through their prices helps children develop budgeting skills.
  8. Budgeting Basics
    • Concept: Introduce basic budgeting.
    • Example: Create a simple budget with your child for their allowance.
    • Why It’s Important: Learning to budget teaches kids how to allocate resources effectively.
  9. The Value of Coins and Bills
    • Concept: Teach kids the value of different coins and bills.
    • Example: Organize a coin-sorting activity.
    • Why It’s Important: Knowing the value of money helps children with mathematical skills and financial literacy.
  10. Role of Banks
    • Concept: Explain what banks do.
    • Example: Visit a local bank with your child and explain its purpose.
    • Why It’s Important: Learning about banks provides children with an understanding of financial institutions.
  11. Opening a Savings Account
    • Concept: Consider opening a savings account for your child.
    • Example: Take your child to the bank to open a savings account.
    • Why It’s Important: Opening a savings account teaches kids about financial responsibility.
  12. Making Change
    • Concept: Use role-playing games to teach kids how to make change.
    • Example: Set up a pretend store at home with items for sale.
    • Why It’s Important: Making change develops critical thinking and arithmetic skills.
  13. Using Money in Transactions
    • Concept: Show kids how transactions work.
    • Example: Let your child hand over cash or a card at the checkout during shopping trips.
    • Why It’s Important: Understanding transactions helps kids grasp the flow of money.
  14. The Concept of Debit and Credit
    • Concept: Introduce the difference between debit and credit cards.
    • Example: Use toy cards to role-play scenarios where your child chooses between debit and credit.
    • Why It’s Important: Understanding debit and credit cards helps kids manage personal finances.
  15. Online Safety with Money
    • Concept: Teach kids about online safety with money.
    • Example: Discuss online safety rules with your child and show them how to recognize secure payment methods.
    • Why It’s Important: Online safety awareness protects kids from fraud.
  16. Importance of Sharing
    • Concept: Encourage generosity by teaching kids about sharing and donating.
    • Example: Organize a family charity project where your child can donate a portion of their savings.
    • Why It’s Important: Sharing and donating teach kids about compassion and the impact of contributing to society.
  17. Delayed Gratification
    • Concept: Teach the value of delayed gratification.
    • Example: Use a savings chart to show how small amounts add up over time.
    • Why It’s Important: Delayed gratification develops patience and discipline.
  18. Understanding Discounts and Sales
    • Concept: Introduce the concept of discounts and sales.
    • Example: During sales events, involve your child in comparing prices before and after discounts.
    • Why It’s Important: Understanding sales helps kids recognize opportunities to save money.
  19. Keeping Track of Money
    • Concept: Help kids keep track of their money.
    • Example: Set up a weekly money review where your child writes down their income, spending, and savings.
    • Why It’s Important: Tracking money teaches accountability and transparency.
  20. The Role of Taxes
    • Concept: Introduce the concept of taxes.
    • Example: Use a simple example, like paying a ‘tax’ on their allowance to go towards a family treat.
    • Why It’s Important: Understanding taxes provides insights into civic responsibilities.
  21. Making Smart Money Choices
    • Concept: Encourage kids to make smart money choices.
    • Example: Create scenarios where your child must choose between two purchases.
    • Why It’s Important: Making smart choices empowers kids to evaluate options and outcomes.
  22. Entrepreneurship Basics
    • Concept: Spark their entrepreneurial spirit by encouraging small business ideas.
    • Example: Help your child set up a lemonade stand or online craft shop.
    • Why It’s Important: Entrepreneurship fosters creativity and independence.
  23. Financial Goal Setting
    • Concept: Help kids set financial goals.
    • Example: Work with your child to set a financial goal and create a plan to achieve it.
    • Why It’s Important: Goal setting encourages focus and perseverance.
  24. Borrowing and Lending
    • Concept: Explain the concept of borrowing and lending.
    • Example: Role-play borrowing scenarios with your child.
    • Why It’s Important: Understanding borrowing helps kids navigate financial relationships.
  25. Managing Allowance
    • Concept: Teach kids to manage their allowance by dividing it into spending, saving, and sharing categories.
    • Example: Establish a regular allowance system and guide your child in dividing their money.
    • Why It’s Important: Managing an allowance teaches kids budgeting and financial prioritization.
  26. Needs vs. Wants
    • Concept: Discuss the difference between needs and wants.
    • Example: Create a ‘needs vs. wants’ collage with magazine cutouts or drawings.
    • Why It’s Important: Understanding needs versus wants helps kids make thoughtful spending choices.
  27. Planning for Big Purchases
    • Concept: Show kids how to plan for big purchases.
    • Example: Work with your child to plan for a big purchase by creating a savings timeline.
    • Why It’s Important: Planning for big purchases teaches children patience and the value of saving.
  28. The Value of Hard Work
    • Concept: Reinforce the idea that hard work leads to rewards.
    • Example: Introduce a reward system for chores or academic achievements.
    • Why It’s Important: Learning the value of hard work encourages a strong work ethic.
  29. Importance of Financial Literacy
    • Concept: Encourage ongoing learning about money.
    • Example: Read financial-themed children’s books together.
    • Why It’s Important: Financial literacy equips kids with the knowledge they needto navigate the financial world effectively.
  30. Avoiding Debt
    • Concept: Discuss the risks of debt and the importance of living within their means.
    • Example: Use a simple story or analogy to illustrate the concept of debt.
    • Why It’s Important: Understanding debt helps kids make informed decisions about borrowing and ensures they use credit responsibly.
  31. Investing Basics
    • Concept: Introduce the basics of investing.
    • Example: Use a jar of coins to explain compound interest, showing how money grows over time.
    • Why It’s Important: Introducing investing concepts helps children understand how money can grow over time and encourages long-term financial strategies.
  32. Understanding Interest
    • Concept: Explain the concept of interest.
    • Example: Place a coin in a jar every day to show how interest accumulates.
    • Why It’s Important: Understanding interest helps kids see the value in saving money and encourages them to use financial institutions.
  33. Building Credit
    • Concept: Introduce the concept of credit and its importance.
    • Example: Use a point system at home where good behavior earns ‘credit points’.
    • Why It’s Important: Understanding credit helps children grasp the importance of maintaining a good financial reputation.
  34. Evaluating Financial Decisions
    • Concept: Teach kids to evaluate financial decisions by considering outcomes.
    • Example: Create scenarios where your child must choose between financial options.
    • Why It’s Important: Evaluating financial decisions fosters critical thinking and informed choices.
  35. Understanding Risk and Reward
    • Concept: Introduce the concept of risk and reward in financial decisions.
    • Example: Use simple games to illustrate risk and reward, like betting pennies on a coin toss.
    • Why It’s Important: Understanding risk and reward teaches kids about balancing potential gains with possible losses.
  36. Preparing for Financial Emergencies
    • Concept: Explain the importance of having a financial safety net.
    • Example: Create an ’emergency fund’ jar for your child.
    • Why It’s Important: Preparing for financial emergencies helps children understand the importance of saving for unforeseen events.
  37. Understanding Inflation
    • Concept: Introduce the concept of inflation.
    • Example: Use the cost of candy over time to illustrate inflation.
    • Why It’s Important: Understanding inflation helps kids grasp the concept of changing money value and the importance of saving and investing.

Conclusion

Teaching kids about money empowers them with the knowledge and skills they need for financial success in the future. By starting early and making learning fun, you can help your child develop a healthy relationship with money that will benefit them for a lifetime.

We believe that financial education should be accessible and enjoyable for everyone. If you found this post helpful, please share it with others who might benefit. Let’s work together to equip our kids with the knowledge and confidence they need to manage money wisely.

Thank you for reading, and stay tuned for more insights on raising financially savvy kids!

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