How To Teach Kids About Money?

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    As we venture deeper into the age of digital finance management, you need to start teaching children about money early. The earlier you start teaching kids about money, the more poised they would be to plan their finances as adults. They do not only need to learn to count money; they also need to understand the importance of budgeting and saving. This article will give practical tips for teaching your young ones about money in a way they’d love.

    What is money for kids?

    Money is a generally accepted means of exchange and measure of value. Although it has taken many forms recently, money is most commonly in notes and coins. Each country’s government creates the money and currency they use, while banks circulate the money amongst the populace. But kids may struggle to understand the concept fully, so you need to teach them about money differently at each stage.


    Toddlers are not too young to learn skills like money management. They learn by imitating their parents, siblings, and other people around them at this age. Whether you know it or not, your toddler is paying close attention to you; they listen to everything you say and watch everything you do. You are like a mirror to them, and they imitate everything you do. They also pick a lot of habits from you.

    The best way to teach kids about money is to set good examples for them. Create a list of things you need to buy at the grocery store with them. Let them know that you’re doing that to make a budget to spend wisely. Also, teach them not to be willing to exchange things they have for something they don’t need; this way, you teach them to understand the value of money.

    Teach them the importance of savings and budgeting. An excellent way to teach children to save is to get them a clear jar and encourage them to keep a percentage of the money they get from you and other people. A few platforms use special games in a virtual form, like the example above; they also create assignments and worksheets to help toddlers learn about money.

    Preschoolers and Kindergarteners

    Learning money for kids truly begins around kindergarten. You can explain that people require money to buy items like financial literacy books for kids and food after kids pass the toddler stage. At this stage, teachers begin to teach children money, what it looks like, and its real-world value.

    Counting money for kids

    Preschoolers and kindergarteners should begin learning to count coins and banknotes. Teach them to identify each coin and bill, group the coins and bills, and let them count.

    Another method to get kids and money familiarized is by getting them a clear jar for saving money. Each day, they will count how much money they have in the pot and learn to identify the coins and bills.

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    Teaching Children about Money Exchange

    Money and kids are inseparable; once they learn the value of a dollar, they start to see money as a treasure they should collect. However, it can quickly become a problem because they will be unwilling to spend the money. So you’ll have to explain that their money is only worth as many things as it can pay for/ buy.

    For example, tell them that they need money to buy a chocolate bar, and they may get some change depending on the amount given to the person at the counter. Another example is to take your child to a grocery store and provide them with some dollar bills. Tell them to get something that they want and pay at the counter.

    You can also set up a pretend store at home to help understand the concept of exchange. You can put price tags on objects like pencils, toys, and clothes in this mock store. Alternatively, accelerate their learning by hiring a tutor who will teach your kid how to count money using special games and worksheets. They will not only learn the concept of exchange, but they will also know how much change they will collect after paying for an item.

    First to Fifth Grade

    In this grade, your kid now understands counting and exchange. They already know how to purchase goods with money and calculate their change. Their next step is learning how to earn money, save, and understand opportunity costs.

    Earning money

    Kids need to understand that money does not fall from the sky or grow on trees, so they need to earn it. An effective way to teach them how to make money is to pay them for completing their chores like taking out the trash, mowing the grass, and cleaning their rooms. Pay them for doing their homework early and getting good grades. Experts believe that children who earn an allowance are more familiar with money than those who don’t.

    Earning money


    The next step is to teach them to save a percentage of the money they earned from doing the chores. Teach them the importance of savings and explain why they need to save, either for emergency funds or to get something they have always wanted. Once they get used to it, saving a portion of their earnings will become second nature.

    You can also introduce the banking system to them. Explain the benefits of saving money in the bank rather than at home. Take them to the bank and open a savings account for children, help them deposit the money they’ve earned so far into their savings account. They can continue saving in their piggy bank or clear jar and take them to the bank to deposit when the jar is full.

    Opportunity Cost

    Explain to your child the difference between needs and wants. Most parents might find it hard to explain the concept to their children because they might not understand it themselves. But you can start by teaching your kids the importance of smart shopping.

    Opportunity cost is the price of something you let go of to purchase another. The simplest way to explain this idea to them is by saying, “If you buy this toy, then you won’t have money to buy a pair of shoes.” At their stage, they need to learn to weigh their decisions.

    Kids want to have all the toys in the world, but, as parents, you should teach them to avoid impulse purchases. If your child sees a toy or a dress they like and wants to buy it as soon as possible, encourage them to wait at least a day before purchasing. This delay will give them time to think and make level-headed decisions.

    Six to Eight Grade

    Between the sixth and the eighth stage, children already know how to earn money and the importance of saving. They understand the basic money principles and need to advance to income, budgeting, contentment, and giving.


    Your child needs to know that they will most likely need a degree and a job to earn income when they grow up. They would need to know what they want to become when they grow up. So, go over different career opportunities and help them pick one based on their talents and passion. Also, teach them the importance of personal and public investments.


    If your children are too young to make a personal budget, introduce them to the family’s budgets, excluding loans and mortgages. At this stage, they need to know how and why a budget is necessary. Involve them when planning a family vacation or a weekly grocery shopping budget. Before going to the grocery store, make a list of what you want to buy with them. Teach them to scale their preference by writing what you need in the order of their importance and writing what you want next.

    Contentment and Giving

    As your children grow older, the pressure from peers comes in. They begin comparing themselves to others and won’t want to miss the fashion trend going on in school. Your kid will want to have whatever their friends have; they want to get the nicest gadgets, sneakers, and dresses.

    Kids need to learn contentment. They need to appreciate and be satisfied with what they already have. Explain to your child that the iPhone they are using is still good enough to continue with, and they don’t need to always look for the latest gadgets. Let them know they can have a memorable birthday party with what you can provide for them.

    Lastly, teach your sixth to eighth-grader the importance of giving and donating to their favorite charity or cause. Introduce them to volunteering work and contribute to a community project or a church. They can even donate to an orphanage home or give money to someone they know.

    Contentment and Giving

    High Schoolers

    Your child must have grown a bit by high school and would need some financial independence. They would soon be off to college on their own, and you will need to start teaching them to be independent since you won’t be there for them as often. Start preparing your child for financial literacy in high school by introducing them to the following concepts:

    Personal Accounts

    If they don’t already have a savings account, open a personal one for them. This step will take money management to the next level and prepare them for college and adulthood since they already have a considerable level of financial literacy. You should have already stopped paying them for chores at this point. They need to learn that they must contribute to the family without expecting monetary rewards.

    Credit Cards

    The high school stage is the ideal period to give your kids credit cards and monitor their spending regularly. Peer pressure increases at this stage of their lives, especially when they see their friends wearing designer clothes. So talk to them about the dangers of maxing out their credit cards. Also, teach them the risks of accruing student loans before college. Let them learn how interests and credit limits work and know the proper way and circumstance to borrow to avoid landing in debts.

    Paying for College

    When your kids are in high school, they should start preparing for college fees. They need your advice on what college they should attend. Don’t just outrightly pick one for them; give them a list of colleges that you can afford and allow them to weigh their options.

    Get them to start saving for college. If they need to get a summer job, that’s perfect! They could also get a part-time job while still in high school. It’s never too early to start preparing for college, and your child should know the benefits of planning for their college finances.

    Brighterly’s Tutors Teach Money For Kids

    Brighterly is an online tutoring platform that every parent needs to help their child ace math and financial education. This platform has an array of trained tutors that will help your child develop problem-solving skills for adulthood. Brighterly provides math courses that include teaching kids about money, although the teachers don’t teach about money separately. The Brighterly teaching method involves using creative exercises and games to teach your child about core concepts like calculation and money to address real-life problems.


    Early financial education for kids will help them in the long run. It’s never too late to teach your kid the basic principles of finance and money management. Some parents think that exposing children to money at such young ages will incite greed in them, but that’s not true. Your child should learn financial literacy from you and extra help from experts at Brighterly. The earlier you expose them to money, the better prepared they’d be for real-world transactions.

    Kid’s grade

    • Grade 1
    • Grade 2
    • Grade 3
    • Grade 4
    • Grade 5
    • Grade 6
    • Grade 7
    • Grade 8
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