An Age-By-Age Guide to Teaching Kids About Money

Good financial habits are important, and they’re rarely taught in school. This leaves it up to parents to help children build financial literacy and responsible money-management skills.

Looking to give your youngest family members a head start on dollars-and-cents smarts? Your child’s fiscal education can begin earlier than you may think, and it’s most effective when the right topics are covered at the right times. Use our age-by-age guide to teaching kids about money to help your child learn about saving, budgeting, and other financial skills, starting as early as preschool.

Ages 3–6: Learning How Money Works

The best age to start teaching kids about money is between 3 and 6 years old. This is when they begin to understand that money is used to pay for things and grasp prices, value, and other basic financial concepts. Children at this age are also developing a curiosity about how the world works. Many are receptive to basic financial lessons, especially when presented as games or play.

Activities To Teach Kids About Money, Ages 3–6

Use pretend money and goods to play “store” with your children. Talk about the price of each item purchased.
Sort coins with your kids and discuss the names and denominations of each coin.
Get a piggy bank and encourage your kids to put change in it. Occasionally, count the money they’ve collected, record the amount, and point out how their savings have grown.

Ages 6–9: Distinguishing Between Wants and Needs

This is a good age to help kids understand the difference between the things they want and the things they need. Try to drive home the lesson that spending on wants — candy or toys, for example — leaves fewer funds for necessities.

Deciding whether and when to give your child an allowance is a personal choice. But for parents who opt to do so, age 6–9 is a good time to start providing a small weekly allowance tied to savings goals. Help your child understand that by saving their allowance (and avoiding impulse buys), they can build up more money for larger, more gratifying purchases.

Activities To Teach Kids About Money, Ages 6–9

Take your kids shopping with you and ask them to identify various items you see as “wants” or “needs.”
When your child expresses interest in an impulse buy, ask them to wait a week before purchasing. Revisit later to see if the item still feels as important.
If you give your child an allowance, have them identify a longer-term purchase they’d like to make. Create a savings chart to monitor their progress toward their goal.
Make saving fun for kids by rewarding them with prizes or privileges when they reach specific targets.

Ages 9–11: Making Smart Consumer Choices

Between 9 and 11 years old, focus on teaching kids the value of money by comparing purchase options and prices before buying. Kids in this age group may begin developing an entrepreneurial spirit. Many also start to recognize the connection between hard work and making money.

Activities To Teach Kids About Money, Ages 9–11

When your child is planning a purchase, join them in comparison shopping. Evaluate the advantages, disadvantages, and pricing of each option to determine the best choice.
Give your child opportunities to earn extra allowance for taking on more responsibilities or completing additional chores.
Have your kid help with pricing items during a yard sale. Let them handle some of the money collection and change-making when items are sold.

Ages 11–13: Developing Basic Budgeting Skills

Around 11 to 13 years old, many children begin to understand basic budgeting concepts. One of the best ways to teach kids how to budget money is to lead by example. Start having discussions with your preteen about your household budget and how much you devote to each of the categories in it. Explain the importance of monitoring spending habits and making adjustments to save more.

Activities To Teach Kids About Money, Ages 11–13

Give your child a set budget for buying clothing or school supplies. Discuss the options with them as they make their purchase decisions, noting remaining funds versus what’s left on the needs list.
Let your kid plan a small family outing or an event on a predetermined budget. As planning progresses, work with them to make sure all the event needs are covered and remain within spending limits.
Offer your child bonus allowance for recording their income, spending, and savings in a notebook or spreadsheet. Talk with them about any financial goals they have, and use the spreadsheet to track progress toward them. Discuss how cutting back on unnecessary spending will help them save more and achieve their objectives faster.

Ages 13–15: Expanding Financial Independence

As children reach their teen years, they’ll seek more independence. This is a good time to give them increased control over their finances — for example, by opening a bank account and letting them take the lead on managing it. A good first bank account for a teen is a joint checking or savings account opened along with a parent or guardian who can share responsibility for management and fees.

Activities To Teach Teens About Money, Ages 13–15

Put your teen in charge of a small portion of household spending, such as weekly groceries or a holiday gift list. Give them a set budget and help them manage it.
Move their allowance schedule from weekly to biweekly or monthly payments. Work with them to budget their funds so they last through the longer periods.
If you open a bank account for your teen, review their statements with them. Discuss balancing a checkbook, preventing overdrafts, and how interest works.

Ages 15–17: Lessons on Credit and Investments

At this age, many teens are able to understand increasingly complex financial concepts. Talk with your child about borrowing, credit, and making smart investments. If you feel your 15- to 17-year-old is mature enough to handle it, encourage them to take on a summer job for added income. This will help them learn about the realities of earning an income in the real world.

Activities To Teach Teens About Money, Ages 15–17

Review your credit card statements with your teen and discuss interest, due dates, and minimum payments. Emphasize the consequences of accruing more credit card debt than you’re able to pay off each month.
Use The Stock Market Game or another stock simulator to set up a mock investment portfolio for your teen. As they choose and track their virtual stocks, teach them about investment fundamentals and the importance of diversification.
If your teen is working, review their pay stubs together. Discuss income tax, Social Security, and other payroll deductions.

Ages 18 and Up: Preparing for Financial Independence

As an adult, your child will need to be ready for real-world fiscal responsibilities. Prepare them by going over important topics including:

Activities To Teach Teens About Money, Ages 18 and Up

If you haven’t already, help your child open a checking or savings account in their name. Walk them through account-management basics: making deposits, transferring funds, and reviewing statements.
Work with your teen on real-life financial responsibilities. If they already have a recurring bill and a checking account with online or mobile banking, help them set up and complete a payment.
Discuss various types of insurance — health, renter’s, auto — and why it’s important to have coverage in each of these areas.

At The Southern Bank, we pride ourselves on offering friendly, personalized service to all of our customers — and that includes providing guidance when you have questions about any of our banking services. To learn more about our Personal Banking services, from Mortgages to Personal Checking, Personal Loans, Savings & Money Market, Certificates of Deposit (CDs) and more, check out the Personal Banking page on our website. Or, visit one of our local branches for friendly, in-person service with a smile.