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Simple Steps to Raising a Money-Smart Child

child's tennis shoes waiting to be pointed in the correct direction

Teaching your child about money can seem like an overwhelming task, but it’s made simpler when you break it down by age-appropriate activities and teachable moments. Simple Steps to Raising a Money-Smart Child (PDF) will help you do just that, even if you’re not a financial wizard yourself.

Here are some highlights:

Age 2-4

Fred Rogers (aka Mr. Rogers) once said, “Play is the work of childhood.” That same concept applies to teaching your young child about money. Turning lessons about exchange, value and savings into games will not only help your child learn these concepts before most of their peers, but will also help them enjoy the process.

Age 5-7

Around this age, parents start wondering about an allowance. It’s a sticky issue, but most experts say that it should be implemented as a way to teach money skills, not as a way to reward, punish or exert control over your child.

An allowance will help teach your child about wants versus needs, interest-bearing accounts, smart shopping habits and savings goals.

Age 8-10

Around age eight, you can start discussing the family budget with your child to further instill the concept of wants and needs. This is also a great time to introduce delayed gratification, percentage budgeting, and short- and long-term goals. Your child may also be interested in pursuing additional income.

Age 11-13

Preteens face a world of peer pressure. As a parent, there’s very little you can do about it. Let them use this time to make their own decisions with their money, even if it’s something you don’t agree with.

While they’re making their own decisions, reward savings with compound interest. Encourage budgeting and healthy money management skills by spreading their allowance out from once a week to once every other week. You also can introduce basic investing concepts at this time.

Age 14-18

When you’re dealing with a teenager, you’ll want to be sure to introduce money topics as discussions rather than lectures. Focus these discussions around concepts such as goal setting, saving, the functionality of credit cards and budgeting.

Getting a job can also teach your child a lot about money before heading into the real world. They’ll encounter taxes and the processing of their paycheck, whether via paper or direct deposit. It’s also good to propose a conversation about paying yourself first at this point. This skill can either help them save for retirement or pay for a part of their college.

No matter your child’s age, there is an appropriate money lesson. It’s never too early or too late to start. Initiate the process today by downloading Simple Steps to Raising a Money-Smart Child (PDF).