How to Talk to Kids About Money By Age

Talking to kids about money sounds simple enough, yet many adults report their parents rarely, if ever, did it.

Money is ever present in our lives, but talking about it brings up memories and feelings some parents would rather not acknowledge. To develop a healthy relationship with money, kids need easy and entertaining methods to become financially literate.

Tips and Gift Ideas by Age

Preschool: Play games that involve money like “grocery store.” Use items from the cupboards, bathroom, or toy chest. Make play money and place in a cart with costs, (like on “The Price is Right“.) Explain to little kids that more spent on some items leaves less for others, like toys.

Elementary School: When a child receives money, discuss the value of dividing it up into categories: spend immediately, save for a short term goal, save or invest for a long term goal, and give to a cause.

Gift Idea: Mac Gardner’s book, The Four Money Bears introduces the concepts of spending, saving, investing, and giving with cartoon-illustrated bears of each name (Spender, Saver, Investor, Giver). Taken alone, each bear overdoes their job to their detriment, but working together, they create financial harmony.

Another resource: Susan Beacham, a nationally recognized expert on kids and money, has developed a curriculum called “Money Saving Generation.” Beacham’s curriculum was studied by Eric Hagedorn, Ph.D. with seven- and eight-year olds. Children in the study were asked to agree or disagree with this statement: “It is important to have things when I want them.” Among his findings was a 16% increase in kids who disagreed with this statement after following the Money Saving Generation curriculum. One year later, Professor Hagedorn showed this learning gain remained.

Gift Idea: Beacham’s site also has a piggy bank called the “Money Savvy Pig,” which features four labeled slots, corresponding to the four uses for money.

Sixth grade: This is a good time to teach about budgeting. Let kids arrange a small budget, like a monthly snack budget. They choose which items you will purchase for them. Challenge them to make their budget last all month. You can find a monthly budget in the back of The Four Money Bears book, as well.

Eighth grade: This is a good age to encourage side jobs outside the house to earn money such as babysitting and mowing lawns. With budgeting skills and the four uses of money as foundations, they can begin to see the power of compounding in all four areas.

Gift Idea: Savings bonds for future tuition payments (the interest is not taxable if used for tuition) or a contribution to a 529 account for college.

Tenth grade: Talk to teenagers about a budget for a car. You may want to make a payment plan to pay for part of the car, insurance, gas, and repairs. This is a good time to educate them about debt, interest, loans, and credit scores.

Gift Idea: Many companies with names kids recognize (like Disney or Apple) directly issue “gift” stock certificates. You can gift as little as 1 share. You can also use a service like RobinHood to purchase small or even fractional amounts of familiar companies. Suggest the child track the value so he or she can watch the ups and downs daily, weekly, monthly, and over the long run.

For a complete Road Map for kids’ financial futures covering all ages, check out the free download at: And for young adults, try Coin: The Irreverent Yet Practical Guide to Money Management for Recent College Graduates, by NAPFA [link –] member Judy McNary. Covering student loans to spending to starting on the retirement and investing track, COIN is hilariously written in the lingo of Generation Y from the wisdom of a baby boomer Certified Financial Planner™ and mother of three.

Holly Donaldson

Holly Donaldson, CFP® runs an hourly and fee-for-service financial planning practice virtually from her Tampa Bay, Florida office. She also works with clients throughout the U.S. (except Texas) interested in retirement and tax planning advice without product sales or investment management. Holly is the author of The Mindful Money Mentality: How to Find Balance in Your Financial Future (Porchview Publishing, 2013) and publisher of the award-winning monthly e-letter, "The View From the Porch."

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