Money Doesn’t Grow on Trees: 
Teaching Young Kids Smart Money Skills

“Mooooooooom! I need this new toy!”

“Just go to the machine and get some money.”

“Gimme!”

It’s not easy to raise money smart kids. Not only are they influenced by a growing number of people and ideas, but their experience with money begins at a very early age.

The majority of kids have their first retail experience within a couple weeks of being born. And a recent study done by the Money Advice Service argues that kids already have important money habits set by the time they’re seven years old.

Raising “money smart” kids may not seem easy, especially if you’re not confident in your own money skills. Below are some recommendations based on age.

Tips for Any Age

• Get educated. Take advantage of free workshops, online financial education, books, blogs, and more to boost your confidence in talking and teaching money management. Learn more about A+FCU’s free financial education offerings.
• Stick to the basics. Keep it simple and as uncomplicated as possible. Focus on the four main areas of money: Saving, Spending, Earning, and Giving Back.
• Make it relevant and interactive. Games and hands-on activities are the best teachers. What’s more engaging and memorable? A discussion about how to ride a bike or getting on the bike and learning as you go?
• Recognize teachable moments. A teachable moment is any time your child is ready and open to a new idea. The key is to recognize it, take advantage of it, and know when it’s over.

Ages 5 and Under

If you give a three or four year old a choice between a nickel and a dime, he’ll likely choose the nickel because it’s bigger. Kids this age are usually aware that money is involved in buying food and other goods, but they may not realize the full value or full use.

When it comes to talking about money, the goal for this age group is to keep it simple, short term, and don’t expect too much.

• Use open-ended questions to get them thinking. For example, ask them to explain what happens when you take something to the checkout counter. Or, ask them to share how they think you make money.
• Role-play and pretend play. Have them count money, play pretend shopping, or pretend restaurant.
• Encourage them to save for something in the very near future. Keep them motivated by taping a picture to their piggy bank or jar.
• Get them involved with grocery shopping. Ask them to help you make the list before you go. When you get to the store, ask them to help grab the items on the list, and cross them off.

Ages 6-10

Kids this age are old enough to understand basic math and apply that to small purchases. They know money can buy things and are able to plan a little further into the future.

• Set a short-term goal for an item they have recently asked for in the store. Once they achieve their goal, celebrate it by taking them to the store and let them make the purchase.
• Watch TV together and use the commercials as an opportunity to talk about marketing and what commercials are meant to do. Additionally, if they go online or use apps with advertisements, that is another opportunity to talk about advertising.
• Talk about the dangers and costs of sharing information online.
• Consider giving them an allowance. An allowance can be a great way to give kids experience with money – earning, spending, and saving it. It teaches them that money is finite and that once it is spent, it’s gone.
• If they’re receiving an allowance, consider opening a saving account. Have them go through the process of opening an account and making deposits.

Looking for more tips on raising money smart kids, visit aplusfcu.org/moneyedu for access to free, online, on-demand financial education courses.

Got questions, contact the Financial Education team at [email protected].

Sponsored By: A+ Federal Credit Union