If you want to set your children up for success, start teaching them as early as you can. Academic literacy is the basic but life skills are essential and crucial as well. Amongst the list of life skills they need to know, money management is one of the most important. Money management in children is critical, after all, they’ll deal with money all their lives.
One of the most confusing moments of parenthood is wondering when you should start talking about money to children. But many people would say it’s important to introduce money to kids as early as they can, so the little ones can start practicing how to work with it, manage it, and learn how to spend wisely.
Ages 3 – 5 (Preschool and Kindergarten)
Children aged 3 to 5 are indeed young but they are teachable about basic money concepts. If you start teaching kids from this age, by age 7, they would develop good financial understanding.
Preschool and kindergarten ages are the ideal stage to start explaining that material goods cost money. It’s also a perfect time to introduce your kid to piggy banks and help them understand the concept of spending. And remember, you, the parent, is the greatest influencer over your children’s habits and that includes money so always set a good example by showing them that you also value money.
Ages 6 – 14 (Elementary and Middle School)
Ages 6 to 14 are a good time to start having your kids help you with grocery shopping, explaining to them why you decide to stop at certain stores, how and why coupons and sales are important, and how to be selective of brands in accordance to the prices and budget.
Ages 16 – 19 (High School)
By high school, your children should be able to understand more complex money management concepts and have a good level of financial literacy involving earning, saving, spending, and sharing. It’s a good age to introduce credit cards, the dangers of maxing out credit cards, how interest works, limits, and the importance of building credit.
Since this age is also a fragile time for teenagers, it is best to have some refresher and remind and emphasize the difference between wants and needs and make sure that they know the value of money.
Money Management in Children: How?

Financial experts and studies suggest that by the age of seven, most children would have already understood the concept of money, how it works, as well their attitudes towards it. This means that if you want your children to know how to carefully handle money, you need to teach them its value as soon as they know how to count.
This is an easy feat, of course. Some adults even have a hard time being prudent with money, what more of kids? But as parents, there are easy ways how we can help money management in children.
Be an example
Being a parent is more than just feeding and taking care of the kids. It also means setting and being an example to them. Your children look up to you and their little and curious eyes are always on your every move. If you’re slapping down money at every unnecessary thing, they’ll pick up on that or if you and your spouse are arguing about money, they’ll notice that too. Be a healthy example.
Teach them how to earn
Children can and are able to learn the concept of earning as young as 2 to 4 years old. Simple chores like cleaning their room, making their bed, or putting their toys away are teachable opportunities. For completing easy housework, reward them. Even if it’s not much, even if it’s just a dime, instill the habit of earning in your child.
Guide them on their spending
One of your children’s first financial decisions is deciding how to spend their money. If they’ve earned it through hard work, they are more mindful of how to spend it. This is why teaching them how to earn is just as important as savings. If they are used to being handed things, they will not be able to appreciate money and its value.
However, it is also important for children to decide for themselves and learn from the consequences if there are any. Money management and decision-making skills often come hand-in-hand.
Educate them on needs and wants
Even adults have a hard time distinguishing their needs and want. But this does not mean you should give up on teaching your kids about it. As early as you can, teach your children the difference between needs and wants before making a purchase. Educate and guide them but allow them to make decisions for themselves. The outcome might be good or bad but kids should also face the consequences of money-related issues for them to learn and be financially responsible adults.
Introduce budgeting
The backbone of finances is budgeting. And household heads would know. Teach your children about budgeting and why it is important to avoid debts. For starters, you can ask your child to take note of all the expenses they’ve made for a month and help them plan for the next month. For older kids, an excel sheet is useful, as well as multiple money saver apps that record your monthly expenses and provide a detailed report on how the money was spent.