Kids and Money: Teaching Kids Money Management Skills

Teaching Kids Money Management Skills

Keep it Brief
Learn More

Bottom Line

Your kids are smart, but are they money smart? Give your children the education that they need to become savvy money managers; it’s a gift that will last a lifetime.
Read the Full Story »

Must Know

See All

Kids learn money management by watching you.
Even young children learn how to manage money by watching how you handle it. One of the best ways to teach is to be responsible with money yourself.

By: Life123 Editors
Explain why you work.
Preschoolers are very curious about your job. Explain to them that the money you earn is used to pay for clothes, food and toys.

By: Life123 Editors
Get a piggybank.
As soon as you start an allowance, get a simple piggybank and encourage your child to save for expensive items, such as toys or video games. Consider matching your child’s savings dollar for dollar or adding a weekly interest payment.

By: Life123 Editors

Trap Door

See All

Cap the allowance.
Tell your child that once the allowance is gone, it’s gone. If you’re a source for easy money, your child won’t learn how to budget.

By: Life123 Editors
Don't bail your child out.
It’s tempting to pay off that cell phone bill or provide some extra gas money, but it’s much better for teens to experience the hardships of poor money management when the consequences aren’t severe.

By: Life123 Editors
Avoid ATM cards.
Teens are far more likely to spend responsibly if they don’t have easy access to their money. If your child has a checking account, restrict its use to paying for monthly bills, such as car insurance or a cell phone.

By: Life123 Editors

Experts Say

See All

ParentingOurChildren.com

Fun Money - When kids are older then give them fun money. This is a budget with say $20, to do what they want to with their friends or with you on a weekend. The $20 has to pay for their activity, food, arcade whatever. Then kids will learn how much a movie and popcorn really costs.

Teaching Kids Money Management, ParentingOurChildren.com
MoneyManagement.org

Provide extra income opportunities. Help them learn that money is something you earn, not something you are entitled to. This is also a great way to get the child involved in extra family chores.

Teaching Children about Money, MoneyManagement.org
MoneyInstructor.com

Children who get an allowance should have it explained to them what they will be required to use it for. You can teach children to always put 10% of their allowance in savings, another amount toward a charity, and then the rest is for their spending. Let the children see when they earn interest on their bank accounts too.

Teaching Children and Teens about Money, MoneyInstructor.com