Your kids have been modeling your behavior since they were small. And they’ve likely been watching you handle money along the way, each time you go to dinner or a grocery store. So teaching them about finances doesn’t have to be a heavy lift. It’s just one more way they can learn good habits from you.

But we do have a few suggestions for the topics you need to cover with them, such as setting (and sticking to) a budget, identifying where money is going, understanding how to save up for something special, and getting out of a tough spot if they overspend. Read on for all of our tips, for you and your kids.

Teaching Kids About Money at Any Age

Financial lessons are not things children learn overnight. They’re learned over time through teachable moments, family practices, and by following examples. 

Pre-Schoolers and Kindergartners

The earlier you start a child’s financial education process, the better. Here are some examples of activities you can do with children ages 4-6:

  • The three jars. Set out three jars, which represent spending, saving, and giving. Money in the “save jar” teaches delayed gratification by encouraging children to save up to buy something that may be more expensive. And finally, money in the “give jar” teaches children a sense of social responsibility and stewardship by allowing them the opportunity to give back to a cause they care about.
  • Open a savings account. After your child has saved up enough money to open a savings account (typically $30-50), have them come with you to the bank to open an account in their name. They can even take their “save jar” as an initial deposit!
  • Associate the word “no” with spending. When your child is in the store and wants two different things, have him/her choose which one they want more and put the other item back.

Elementary Students and Middle Schoolers

Around the age of 7, children should be working on addition and subtraction in school, and are now old enough to understand the concept of bills and budgeting.

  • Start giving allowance. The exact amount will vary depending on your situation and personal history, but a rule of thumb is a dollar per year of age, so a 7-year-old may be getting $7 a week (or month) of allowance. Apps like Greenlight and GoHenry can help them track their earnings as well as complete tasks in exchange for money/allowance.
  • Practice budgeting. Plan a normal shopping trip, whether it’s for back-to-school, Christmas gifts, or a grocery run. Work together to develop a budget and stick to it! Be transparent in why you choose each item based on brand, price, or a sale.
  • Show them receipts. After purchases, show your child your receipt and explain how to read one, as well as what you need to do in order to return an item to the store. 

Teens & College-Bound Seniors

At this age, young teens start going out with their friends and spending money more independently, which means it’s time to discuss wise purchases, credit cards, loans, scholarships, and investing.

  • It’s time to talk credit cards. Your teen may have seen you purchase items with your credit card at the store, but it’s important to go over how debit and credit cards work, and the importance of always paying back your credit cards in full and on time. Show your teen your credit cards and explain any differences among them. Then when you receive your next statement, teach them about balances, accumulating interest, and minimum payments. Most importantly, go over how to avoid falling into the trap of credit card debt.
  • Demonstrate wise purchases. As your teen begins making and spending their own money regularly, it’s important for them to start discerning when to go cheap and when to buy quality items — and how to identify that quality. 
  • Show them how to request a credit report. Explain how credit reports may affect your mortgage rates, credit card approvals, apartment requests, or even your job application. Have them request their free annual credit report and review the information within it.
  • Teach them how to find and apply for college scholarships. Encourage your teen to begin searching for scholarship opportunities early, compiling a list of any that may be relevant to their background or career goals. It can be tempting to step in and apply for them, but it’s important for your child to fill out the applications and complete the essays on their own. There are many different ways you can support them through this process.

Just as important as the lessons you teach your kids about money, nothing instills habits in them quite like the habits they learn from watching you. If you’re spending frivolously, they’ll eventually notice and may copy your behavior. If you and your spouse are arguing about money, they’ll notice that, too. Set a healthy example for them and they’ll be much more likely to follow it when they get older.

Other Healthy Money Habits:

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