As a parent of two, I’ve come to realise how important it is to teach kids about money in a way that gives them real skills — skills that help them avoid debt later and use their money wisely. Here are my top tips for teaching kids about money.
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I never had lessons about money and budgeting at school, and I certainly wasn’t very wise with my own money in my twenties once I started earning. Anything I can teach my children now gives them a head start and, hopefully, helps them avoid some of the mistakes I made.
Tips For Teaching Kids About Money
#1. The difference between needing something and wanting something
It’s really important to teach kids the difference between wanting something new and needing that thing. When my daughters were younger, if they asked for something new, we’d have a little chat about whether it was something we needed or just wanted.
If we did decide to buy the new toy, book or item, we made sure we donated an old one to charity — one thing in, one thing out.
Tip: Ask your child to identify whether something is a need or a want, to help them learn the difference.
#2. Where money comes from
Your child may think money comes from a hole in the wall, but it’s a good idea to start teaching them early on that you have to work to earn it.
Some parents choose to tie pocket money to chores to reinforce this. In our house, chores are just part of helping the family, and we’ve given pocket money in the past without any expectation attached — but more recently we’ve found it useful to tie certain extra chores (on top of the normal ones) to earnings as a motivator.
If you work outside the home, taking your child to work for a day can also help reinforce that it’s not some mysterious place you disappear to, but somewhere you do things in return for your salary.
#3. About bills
As your child gets older, it’s good for them to start realising that bills come into the house and have to be paid. Often the only post that arrives these days (apart from junk mail) is a bill. Why not open it together and talk your child through it — how much it is and how you plan to pay it.
If you use a money-tracking app, program or spreadsheet, show them the monthly items on it so they become familiar with ideas like utility bills, food bills and so on.
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#4. Budgeting
One of the best things you can do for your child is teach them how to budget. A simple way to start is by agreeing a set amount of money before you go somewhere like a shop, and then trying to stick to it.
Talk about planning money and how you need to have something left over after all the monthly bills, so there’s room for nice things, savings, or a cushion for unexpected costs.
Tip: Monopoly is a great game for introducing children to money, costs and budgeting.
#5. Saving money
Another great habit to build is saving — especially when your child wants something new. Try giving them two jars labelled “Saving” and “Spending”, and whenever they get money, some goes into each jar.
Take them along to open a child’s savings account, and encourage them to put a portion of birthday, Christmas or other gift money into savings too.
You can also reward saving — for example, by matching what they save to help motivate the habit. We did this recently for one of our daughters who wanted to save up for something big.
#6. Setting goals
Linked to saving is setting goals for money, especially longer-term goals like saving up for a bigger item. It ties in with the two-jars idea too — some for saving, some for spending.
Instilling these ideas from a young age helps them become second nature.
Tip: Ask your child to choose a goal — something they’d like to save towards — and get them to draw one of those “thermometer” diagrams that fundraisers use, to track their progress.
#7. Choosing
Another lesson worth teaching is about choosing. Very few of us have so much money that it doesn’t matter what we spend it on, so life involves making choices about where our money goes.
Talk to your child about the choices they’ll need to make about their own spending.
Tip: Let your child help choose things in the supermarket, so they get practice at making spending decisions.
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#8. Good things come to those who wait
Teaching your child that instant gratification isn’t the road to happiness can help combat the “buy now, pay later” mindset that could lead to debt problems down the line.
Try to emphasise experiences over things. It’s tempting as a parent to give kids presents all the time, but many of us grew up with presents only at birthdays and Christmas — and were none the worse for it.
Tip: When out shopping, tell them you’ll leave the item they want for now, and if they still want it in an hour, you can go back for it. This gives them time to think and helps curb impulse buying.
#9. Don’t spend it as soon as you get it
This is a tough one, because cash in hand can “burn a hole in the pocket,” as the saying goes — kids can feel like they must spend it straight away.
Curbing impulse buying goes hand in hand with teaching delayed gratification. If they’ve been given money and are desperate to spend it, chat about what they actually want to buy and how much of it they want to spend before you even go to the shop.
Tip: Talk to your child about the need to plan and budget before you go shopping.
More tips from parents for teaching kids about money
Here are some tips that MyKidsTime parents have shared on teaching kids about money:
- “A family day out can end up costing lots. We agree a budget with each child and give them the money on arrival. We are clear they can spend the money on whatever they want, but once spent, there will be no top up!” — Denise
- “I give my 6 year old 2 euro when we go to the shop. He can decide to spend the money or keep it for another time.” — Ophelie
- “I give them pocket money, allow them to budget or not, and don’t allow them to think it grows on trees!!!” — Fiona
- “I let my 6 year old pay for things in shops. When she gets money for presents, we put some in the post office and she spends the rest on herself.” — Carmel
- “We encourage saving any bit they get for things they may want or need in future, as opposed to spending every penny on rubbish every time they get a few bob… We tell them money doesn’t come easy, so save your pennies and don’t waste. Worked so far.” — Cheetra
- “When they get money, if it’s a pound they can spend it on whatever they want. If it’s Christmas or birthday money, they’re asked to think about whether there’s anything they want or need — if not, it gets saved. They also earn money around the house doing simple things, since she’s only 6: put washing in the bathroom, take a plate out and scrape it, keep her bedroom tidy, help when asked — each worth a small amount, with a bonus on top if all is done, rounding it up. So far she has saved her money and has a good understanding of the value of it. We’ll be doing the same with our son.” — Louise
- “I get the kids to pay for things, we role play shop and buses, etc. This week we started pocket money!” — Megan
- “Not to eat it! Also that when she finds change in the house, it goes into her piggy bank.” — Shellie
- “My 9 year old has to do chores to earn her pocket money (I work to earn mine), and if she wants anything she has to save up for it — just like we do.” — Samantha
- “We recently made our 10 year old son earn money for a jersey by doing jobs — he washed and valeted my car and sold ice cream wafers door to door (my husband did most of the actual work!).” — Tara
- “My 11 year old wanted a mini iPad, so we said if she saved half of it, we’d match the other half. She had some birthday money to start her off, then we agreed extra weekly chores on top of her normal ones to help her earn the rest.” — Siobhan
Have your say! Did you find this article helpful? What tips do you have for teaching kids about money? Share them with us in the comments below.
Frequently Asked Questions
What’s the best age to start teaching kids about money?
There’s no fixed age — even young children can start learning the difference between needing something and wanting something. Simple habits like saving and spending jars can begin as soon as a child starts receiving pocket money or gifts of money.
Should pocket money be tied to chores?
There’s no single right answer. Some families keep chores as a normal part of contributing to the household and give pocket money separately, while others tie extra chores (beyond the everyday ones) to earnings as a motivator. Both approaches can work — it depends on what suits your family.
How can I help my child learn to save rather than spend straight away?
Giving them labelled jars for saving and spending, opening a children’s savings account, and matching a portion of what they save towards a goal are all simple, practical ways to build the saving habit.
What if my child wants to spend money the moment they get it?
This is common and ties into delayed gratification. Try talking through what they want to buy and how much before you go shopping, rather than deciding in the moment — it helps curb impulse spending.
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