How To Teach Finance to Children

Did you know that a child’s financial habits are formed by age seven? Teaching them at a young age will help them learn about the importance of money, saving, and spending, and will also affect how they manage their money in the future.

How To Teach Finance To Children

But before you start teaching them how to save, they must know the basics of money and where it comes from.

Explain The Concept Of Money Point We can't teach our kids how to save and use money if they don't even know what it is and how it works in everyday life. You can start by letting them know how money is earned and what you do with it. Action Tell your child that you and dad go to work everyday to earn money so that there is food on the table everyday. "Dad spends his whole day at the office because that's how he earns money. And money is what we use to buy our things." "We use money to buy the pancakes you ate for breakfast."

Saving vs. Spending Point They should know the meaning of saving and spending. Let your kids realize that if they want something, they should learn how to save money, and once they've decided to spend money on something, they can't spend it on something else. Action Tell your child that if he wants a toy but has no money, he has to start saving money in order to get the toy. "If you want to buy those Hot Wheels cars, you have to save ₱50 a week for four weeks in order to make it yours." "Are you sure you want to buy the doll? If you buy it, you won't be able to get the little pony."

Let Them Know What's More Important Point If your kids don't understand the difference between needing something and wanting something, explain it to them. Let them know that you have to always set aside money for more important things in life, like food, water, and shelter before getting anything for yourself. The fun stuff always comes in second. Action Tell your kids that food and water are more important than a toy. "We need food and water everyday to keep ourselves nourished." "We want to play with new toys but we don't need them everyday. Paying for food is more important because we need to eat to live."

Put your teaching to the test, and engage in some fun activities with your kids. Who says learning can’t be fun? The best part is, they won’t even realize that you’re teaching them because they’ll be having so much fun!

Learning With Money Let them hold the money and study the coins. You can make it a fun activity everyday where you can let them identify the different colors of the bills and different sizes of the coins. As a prize in the end, you can give them a coin as a reward.

Give Them Allowance Giving your kids allowance can teach them the value of money and saving. Allow your kids to do what they want with their money, but also explain to them the benefits of saving.

Get Them A Piggy Bank Get them their first piggy bank! It doesn't have to be a big one; as long as they can put their savings in it. With an allowance, they'll have a safe place to put their money in and also learn the importance of saving.

Set Up A Sari-Sari Store Why not make a small business with your kids? Start off by making some ice candy and selling them to your neighbors. Make a sign that you can hang outside your gate that says "Marco and Andrea's Ice Candy For Sale Only ₱10" and every time someone orders, make sure they're the ones who will receive the payment. At the end, you all can count how much they earned. Don't forget to place all the earnings inside their piggy banks!

Play Supermarket With Them You can also buy some play money, set up a fake supermarket, and ask everyone at home to "buy groceries." Help them price items, write a receipt, and give change. They can also learn that earning money is not an easy task and takes a lot of hard work.



  1. Redington, Troy. “How To Teach Finances To Kids Ages 5-12.” Fat Wallet. Last modified March 23, 2016.
  2. Compare Cards. “The Road To Responsible Spending: Teaching Your Kids About Money.” Visualistan. Last modified April 2015.
  3. Redington, Troy. “How To Teach Finance To Toddlers.” Fat Wallet. Last modified March 16, 2016.
  4. Northern Trust. “How To Teach Your Children Money Values.” Wealth. Date accessed January 11, 2016.
  5. Teh, Kelly. “Kids And Money: Raising Money-Conscious Kids.” Credit Donkey. Last modified May 29, 2014.


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