Teaching the Value of Money: Your Financial Literacy for Kids How-To

When your baby becomes a little money manager and hits that magic age where they start asking for every stuffed animal, box of cookies, or game they see, it can feel impossible to convince them that you’re not a millionaire.

Kids don’t wake up one day with the concept of budgeting or that your money has a limit. After all, they see you buy stuff all the time with that little plastic card! Fear not, parents–teaching kids about money is easier than you think, and you can start at any age.

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Be open and honest about money

Don’t hide your financial mistakes–let your kids know about the money mishaps you’ve had along the way, like taking on too much debt or skipping out on savings. Being transparent will build their trust, lead to more open and healthy conversations, and make it easier for your child to come to you with questions or when they need help managing their own finances.

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take advantage of everyday money moments

Whether it’s explaining why you’re not buying that Star Wars LEGO set or why you budget for groceries instead of toys, these natural, everyday life questions are a great way to teach the basics of financial literacy to your child. Explain concepts like why saving is important, how to create a budget, and what takes priority when it comes to spending money.

‍Example: “We only have so much money each week, and we need to make sure we have enough money for important things like our home and electricity before we buy toys and sweets that we don’t need.”

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get your child involved in family budgeting

Sit down as a family and set financial goals together. Explain how much is needed for each expense and the sacrifices that are necessary to achieve those goals. 

Example: Maybe you can’t go to Disneyland because you need that money to make your house payment which provides your family a safe place to live. 

Even small steps or activities, like using a clear jar as a physical representation of how close your family is to achieving a goal, can be a fun and engaging way for kids to learn. When it comes to finance for kids, just remember that even though your child’s input is valuable and you want to work together, you are the parent and the one who has final say. 

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start young and build from there

The sooner you start teaching your kids about money, the better. Start with simple concepts like saving and budgeting, and build on them as they grow older. These discussions will greatly benefit your child, and you might even find yourself learning new money tips right alongside them.

The world is their oyster, and you want to give them the best oyster-shucking tools. Set your child up for success by investing in financial education for kids with a youth account at SunWest.

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