How to Teach Children the Value of Money: A Guide by Ages


The value of money, choice and saving must be passed on to children from an early age. It will help them become financially responsible adults.

Planning the family’s finances and teaching children how to handle money correctly helps form adults capable of managing their financial life without problems. And to save money for the family budget and for the fulfillment of dreams.

Perhaps you have friends or acquaintances who are or have been in financial trouble. Often, this happens because these adults, as children, were never encouraged to be careful or manage their own money correctly.

Encouraging your children to save money will have many benefits in their adult lives. In addition, it helps you to stay on top of the family budget at all times. This is because habits acquired in the first years of life tend to follow the individual. Not to mention that, at each stage the children enter, new expenses appear. Therefore, it is important to educate them financially, so that they can prioritize what is needed and you can avoid going over budget.

Want to know more about teaching your kids to save money? Keep reading and check out 6 tips!

1. Enter the child’s universe

One of the main mistakes parents make when trying to teach children the importance of money is to speak from their perspective, bringing the child into adulthood. Children are not mini adults.

Talking about the light bill, the restaurant bill or household expenses, in general, will not make sense to the child. However, when the child asks for a new toy or a birthday party, then yes, it may be time to bring up the subject.

2. Offer allowance

It is important that the child has his own money. At that point, the allowance works as a way to teach your child how to manage it.

After the first conversations about the importance of money, it’s time to encourage them to start managing their own resources. The allowance plays an important role at this time. As a month can be a very long period for the child, you can opt for a “week”.

It is also at this time that one of the main questions for parents arises: how much should I offer my children?

Well, there is no fixed rule for that. The family’s lifestyle, the parents’ financial conditions and the child’s reality will influence the decision.

The tip is: offer less in the beginning. It’s easier for you to raise your child’s allowance, even as a reward for saving money, than having to reduce it.

It is also recommended that parents show their children the importance of prioritizing choices. For example, if the child wants to go to the movies, he will have to give up another program, because the allowance amount will not include both programs.

The important thing is to make your child understand that, just as it works with allowance, as an adult, he will have a certain amount of money to use during the month and will make the least amount of financial mistakes possible.

3. Show the importance of saving now to earn later

Teach, from an early age, the importance of saving a portion of the money for a future reward.

For example, you know that toy your child keeps asking for and costs $50? You can encourage him to collect $10 and you, as a reward, complete the remaining amount.

Prizes and rewards are important for teaching about cause and effect.

For younger children, a piggy bank works great. But, if your child is an older child or a teenager, opening a savings account may be the best alternative.

4. Encourage your children to write down their expenses

Another important tip is to encourage the child to write down their earnings and expenses . This contributes a lot to the organization of family finances.

‍ Show her how to record how much allowance she made, how much she spent, and how much she saved that week or month. This is lifelong learning and, when done from the beginning, it ceases to be something boring and complicated and becomes natural.

According to your child’s age, he can list his expenses in his own notebook or in an application, which may be more attractive to him.

It is important that you are with your children during the first notes. So, you can take advantage of this moment to teach them some basic accounts for the financial control of their allowances.

5. Teach your children to spend less than they earn

Another tip that seems obvious, but is not always: explain to your children, from an early age, the importance of spending less than what he earns in allowance.

Show that spending beyond income hinders family finances and sometimes even family relationships.

This will also help the parents themselves to control the household budget. It is also important to explain concepts of conscious consumption.

Do you have children of different ages? Their toys can be shared and, when they are no longer used, they can be donated. Thus, parents also transmit values ​​such as generosity.

6. Be an example and save money

When teaching your child about the importance of saving money, you cannot follow the maxim of do as I say and not as I do.

Children learn a lot from example. When seeing parents control the family’s finances , the child ends up realizing the importance of spending with conscience.

Parents can share the family budget with their children. Thus, everyone will know the financial reality of the family, being able to contribute with household expenses or, at least, to reduce the bills that are high, for example.

Many parents, for not seeing the importance or for not having had these teachings, end up neglecting this teaching. Perhaps because they think that children will not understand financial concepts. Therefore, it is worth remembering again the need to adapt the language to your child’s age.

The Value of Money: A Guide by Ages

No doubt you’ve found yourself telling your children that they have to choose how to spend their allowance money; that they often have to wait to get what they want; or, when the money they receive doesn’t arrive until the end of the month, that they have to know how to manage that responsibility and do better for the next one.

How to Teach Children the Value of Money: A Guide by Ages

Although the allowance is an important tool for financial education, it is necessary, during the different stages of children’s development, to teach them a set of concepts that help them manage that monthly amount – not least because this is not an innate ability.

It is advisable that this sensitivity is developed from an early age so that they can later make the best financial decisions for their lives. That is, that they become autonomous and financially responsible adults .

In theory it seems simple but in practice things are always a little more complex. In fact, it is natural for many parents to have doubts even in the smallest decisions: “should I insist on this matter?”; “Is it too early to address this issue?”; “ when should I introduce the allowance and what amount should I give?

We don’t have conclusive answers to these questions, but we can share with you some ideas that could contribute to your children’s financial education. For this purpose, we have prepared a guide (by age group) that addresses the subject and from which you can clear up some doubts about how  to teach your children the value of money.

Value of Money: From 3 to 5 years old

The popular saying goes that “money doesn’t fall from the sky”. We know the moral of this saying very well, but how can we explain it to children who are so small, whose spontaneity and naivety we so want to maintain?

We cannot always buy what we want, not least because what is at stake are many hours of work that “literally came out of our skin”. Parents know this, just as they know that the simple fact that we enter a store does not always mean that we have to buy something for the children.

How to instill this value? What to do?

It is advisable that, at this stage, children begin to have some contact with money.

For example, if your child would like to have a certain toy, why not agree a savings account with him to buy it? You can even, for that purpose, offer him a transparent piggy bank, so that he realizes that the money is accumulating and even, eventually, give him space to propose creative ways to ‘earn’ some coins – some illustrated postcards for family members (who can contribute a few euros in return).

The important thing is that your child doesn’t feel like it’s enough to ask, but to give something in return. Make this commitment with him and, when you’ve got the money together, buy him the toy (even if you’re missing a few euros). Encourage and, above all, do not fail to keep his word, as it is fundamental that the time he has waited for is, so to speak, ‘rewarded’.

Value of Money: From 6 to 10 years old

At this stage, it is important for your child to understand the concept of choice. That is, since money is not enough to buy everything you want, what to choose? At this age, the child will have some difficulty in distinguishing between an essential good and a secondary good, however, he will have to make the choice. Try to meddle as little as possible in this decision, give her space to think for herself.

In order for the concept of choice to be progressively internalized, why not let your child participate in some of your day-to-day financial decisions. For example, when you go to the supermarket ask your child to help you choose the products to buy.

As he makes choices, talk to him and ask him about it. “Are these products really necessary?”; “Wouldn’t it be better to opt for more priority items?”

This might even be a good time to introduce a weekly allowance, even if symbolic. It will help you feel more responsible for your choices. However, even if your child spends the money before the end of the week, don’t give him more – that way he learns little lessons from his little mistakes.

Value of Money: From 11 to 14

At this age, your children will already have some notions about the importance of saving and, after reaching short-term goals, this is the ideal time to prepare them to achieve long-term goals through savings.

Let’s consider that you are interested in buying a tablet or any other gadget. As this type of articles require a great deal of financial effort, why not talk to him about the concept of interest? That is, if it is fundamental to accumulate money, it is also important to know how to make it grow.

In this regard, familiarize him with how savings accounts or term deposits work, for example,  and gradually talk to him about the difference between credit and debit cards or about other financial applications.

At this stage, you can choose to exchange the weekly allowance for the allowance and clarify the doubts he has about how to monetize the money you give him. The message to be passed on will be that saving helps us achieve our dreams, but that we also need to know how to save.

Value of Money From 15 to 18

As your child grows into a teenager, you can start to make them aware of more complex financial concepts.

For example, if you have a home loan or a car loan, explain the responsibility for the monthly installments you have to pay, as well as the weight they have in the family budget.

Financial freedom: what it is and what can be done to achieve it

The concept of credit itself is fundamental for your child to understand that credits can be good financial management tools as long as they are well managed.


Awareness of effort, the concept of choice, the value of savings and good management of expenses. If we had to draw a chronology from 6 to 18 years old, these would be the fundamental concepts to include in your children’s financial education.

We once again emphasize how important dialogue is, clarifying doubts, direct and indirect contact with expenses and, above all, the value of example. It will not do any good to pass on savings messages if your behavior is excessively consumerist.

Try to give them the necessary tools to become responsible, autonomous and financially stable adults. A day later they will thank you.


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