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Simple Ways To Teach Kids About Money

Updated on December 15, 2012


Teaching children about money early on is something that can stay with them a lifetime.  For children money is a huge responsibility and helping them to understand all about money is a great tool for them for when they get older.

I started teaching my children about money at a young age.  I started by teaching them about the different types of coins.  This can take awhile for them to learn depending on their age but give it time and they will understand.  Slowly I introduced the values of each coin.  During this time I also gave them each a piggy bank of their own.  They loved finding coins to put in them.  This also helped me to show them about the first idea of saving.  Once the piggy bank got full I decided it was time to show them what to do with their money; give it to mommy of course so she can put it in her pocket.  Just kidding!!  Once their piggy banks were full I started a savings account for them.  Every so often when the banks got full (they were relatively small piggy banks) and when they were old enough, I started letting them deposit their money into their own bank accounts.  This was a HUGE experience for them.  But the biggest experience came just this past holiday when they had to sign the backs of checks that they received.  The excitement was almost too much for me to even handle; my babies signing checks.  Teaching children about money is a continual process and there is still a great deal for them to learn.

Now that they are getting older and constantly wanting to buy things I am going to teach them even more interesting things about their money.  What I am teaching them next is how to divide their money into four different categories.  These categories are; savings, spending, charity and investing.  Currently I am going over these ideas with my children so that they can understand each concept.  What I teach my children to do is to split up what they earn or any income they receive from gifts, chores, etc.  They split it four ways into the categories savings, spending, charity and investing.  So if they receive one dollar 25 cents goes into each category or whatever split they feel is acceptable but I started with an even split for simplicity.  It is important for the kids to understand about each category.

Savings - Savings is important because it teaches children how to hold on to money, how to not spend frivolously and also gives children the understanding that if you continue to spend money you will have nothing left. These are concepts that you want your children to understand before they get their first job and before they go off to college. 

Spending – Of course kids are going to want to spend some money and that is part of learning about money.  Understanding the concept that if you pay money you get something in return and understanding also the value of money.  Kids learn quickly that once you pay for something that money is gone and there is something there that replaces that money a very important lesson for kids.

Charity – Charity is an important aspect of money that children need to understand.  They also need to understand that not only is it important to give to charity but that there are also different forms of giving; financial, time or helping physically and donating items. Charity was one of the first concepts that I discussed with my children. This was aided by the charity events that occurred through their school; penny harvest, can food drives and other events took place to help the children understand the concept.  As a family we also make it a process to give away slightly used clothing and toys to charities a process we have been doing since they were little.

Investing – Investing is the last concept that I would introduce to children because it can get quite complex. Although it is closely linked to savings it takes savings to the next level.  This is also only possible with certain amounts of money.  Still saving up money for investing is an important concept. Until your child is able to understand investing and has enough money to start investing they can keep this portion of the money with savings.

Starting your children early on a positive financial path will help them to be financially responsible in the future.  Then you can ensure that your children will be there for you financially as you grow older. 

SchoolHouse Rock - Where The Money Goes

Kids and Money - Children and Money

Children and Money Part I


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    • Triplet Mom profile image

      Triplet Mom 8 years ago from West Coast

      scheng1 - That is true but there are other ways to invest as well.

    • profile image

      scheng1 8 years ago

      The part of investing is hard if the parents lose money in stock market

    • Triplet Mom profile image

      Triplet Mom 8 years ago from West Coast

      Thanks Direxmd!!

    • Direxmd profile image

      Direxmd 8 years ago

      Gah! I love your articles--they are easy to read and fun. Thanks for the read :)

    • Triplet Mom profile image

      Triplet Mom 8 years ago from West Coast

      Thank you very much RVilleneuve. I think that these basics are extremely important for the future. Thanks again.

    • RVilleneuve profile image

      RVilleneuve 8 years ago from Michigan

      Nice teaching about the basics!

    • Triplet Mom profile image

      Triplet Mom 8 years ago from West Coast

      Thanks Mulberry1 its good to know that I am heading in the right direction. I know that after time it will be up to them but if they start on the right track hopefully they will stay on track. Thanks again.

    • mulberry1 profile image

      mulberry1 8 years ago

      You're teaching your kids some very important skills; and you're right it will be with them for the rest of their life. My parents taught us much as you have done, and it's served me very well. Great hub!

    • Triplet Mom profile image

      Triplet Mom 8 years ago from West Coast

      Thank you ripplemaker. What a fun idea that is. I think that would be great to decorate bottles like that. Yes money is a great way to teach kids so many things. Thanks again.

    • ripplemaker profile image

      Michelle Simtoco 8 years ago from Cebu, Philippines

      I agree that we should teach our kids about money. Savings is indeed a great way to start. In our preschool, we had the kids decorate their transparent bottles so they can start saving their allowance (while we study addition, subtraction and money) Great hub :-)

    • Triplet Mom profile image

      Triplet Mom 8 years ago from West Coast

      Thank you einron!!

    • einron profile image

      einron 8 years ago from Toronto, Ontario, CANADA

      Good tips for teaching children how to save.


    • Triplet Mom profile image

      Triplet Mom 8 years ago from West Coast

      Anna Marie - Thank you!! I love that money especially coins are great fun for kids, that is what makes it great to teach them when they are so young. And you are right it is a great way to teach math and values a wonderful teaching tool all around.

    • Anna Marie Bowman profile image

      Anna Marie Bowman 8 years ago from Florida

      This is a great hub!!! I loved teaching my daughter about money! She would find change lying around and assume that it was hers, and run and put it in her piggy bank. She loves knowing that she has her own money. She doesn't want to spend it, either. She would much rather play with it. It makes a great tool for teaching sorting, counting and values, as well.

    • Triplet Mom profile image

      Triplet Mom 8 years ago from West Coast

      jcd - That is so great that you are teaching your children about money. Wonderful idea about the cars as well. Something that I had not thought of but will use as well.

      SweetiePie - Thank you. I grew up on School House Rocks and I laughed at that same idea. But the concept is still valuable. I have the series for my kids because it is a great teaching tool for them.

      Darlene Marie - Thank you very much. I feel that this is an extremely important topic for their future.

    • DarleneMarie profile image

      DarleneMarie 8 years ago from USA

      Great tips for teaching children the lessons and values of saving, charity, investing and spending.

    • SweetiePie profile image

      SweetiePie 8 years ago from Southern California, USA

      Great hub. I especially liked the video you included from School House Rocks and it is cute how certain things are really outdated on that program now, how when they sing if they inherited a million dollars there would be no need to save :). I think it is great you are teaching your kids how to count money, which is a skill they will need through out life.

    • jcd302 profile image

      Jason 8 years ago from Belding, MI

      I take them to the credit union and make them go to the counter, talk to the teller, do everything. They tease each other about who has more. Our daughter is 4 years older, but she bought her first bike herself, so they are about even. She babysits occasionally so she is starting to learn what it is like to earn money instead of just getting gifts.

      Once I find a car for her (non-running), she is going to learn to repair it and buy parts. When she knows how hard & expensive it is to repair a car, she will have a greater appreciation for it then if it was just given to her.