Teaching Kids About Money – 12 best ways for homeschool parents

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Teaching kids about money can be a daunting task, but it is one that is well worth undertaking. By teaching your children about financial responsibility at an early age, you can help them to develop sound money management skills that will set them up for financial success in the future.

We’ve compiled 12 of the best age-appropriate ways to teach your kids about money – everything from allowance to investing and how to make it fun. You’ll find tips for every age group, so you can start your kid’s financial education today.

1. Teaching kids about money from a young age

The earlier you start, the better. When it comes to learning about personal finance, starting early gives you a big advantage. Basic concepts are easier to grasp when you’re young and money habits start young, so helping them with money matters now will set them up for success later on.

Most schools don’t teach kids financial literacy, so you’ll probably need to take responsibility for this as a parent. If you homeschool your kids, this is the perfect opportunity to instill some essential life skills.

The best way for them to learn financial literacy is to practice alongside you while learning financial concepts. Parents should talk to their kids about money regularly and help them to develop good money habits.

2. Create opportunities for them to earn money

One of the most effective ways to teach young kids about money is to give them opportunities to earn it. This could be as simple as setting up an allowance system or providing regular odd jobs around the house. For example, you might pay your children for completing weekly chores like mowing the lawn, cleaning their room, or doing the dishes.

Help them start a business

If they are old enough, you can also help them start their own business where they will learn incredible financial lessons.

This can be an effective way for them to learn how to earn extra money and gain valuable skills in the process. You can start small, such as having them sell homemade crafts or doing odd jobs around the neighborhood. This will help teach them important lessons on entrepreneurship and give them a sense of financial independence. 

Two girls play games using pretend money as they are taught about money naturally.

3. Make vs buy

One way to teach kids about money is to get them used to the idea of making vs. buying. When they see that something they want can be made instead of bought, they may be more likely to consider the cost before they spend money on it.

To help kids understand this concept, you can start by having them make some simple things like greeting cards or picture frames. You can also encourage them to get creative and make their own toys, like a dollhouse or a car out of cardboard. Not only will this save money, but it can also be a fun activity for the whole family.

4. Avoid impulse purchases and set goals

Once they have their own money to spend, it’s best to guide your kids about to best spend their money. Try to avoid impulse purchases, and help them find good deals on things they need.

One of the most important concepts that kids need to learn early on is the difference between needs and wants. You can help teach this by explaining how needs are things like food, water, and shelter, while wants are things like new clothes or a new toy.

You can also help them understand why saving up for things they want is important instead of just buying them outright. Goal setting like this will help them develop good money habits that will serve them well in the future.

Try opening a savings account and depositing a small amount into it every month. This will allow your child to see their money grow over time – and will be exciting for them

A mom assists her daughter with money in this post about teaching your kids about money

5. Teach them about debt and credit

Debt and credit are essential concepts for children to understand because it is something that will massively affect their financial life later on. Debt can be a burden if not handled carefully, and it can impact things like buying a house or car.

At the same time, talk to them about the benefits of credit cards and loans when used responsibly. Teach them what is considered a good vs bad purchase, and help them understand the importance of paying bills on time.

A great resource for this is the book “Rich Dad Poor Dad” by Robert Kiyosaki and Sharon Lechter.

6. Teach kids about investing and saving

Once kids understand basic concepts like saving and debt, you can introduce more advanced topics such as investing. Investing can be confusing, but it’s important that children understand its importance as a way to grow their savings.

Start by teaching them basic investment concepts like investing in the stock market or purchasing bonds. Later when they are older you could introduce other financial topics like investing in mutual funds, compound interest, and retirement accounts.

You can also give your children age-appropriate tasks like setting up a 529 plan (an investment plan for higher education in the USA) or helping them open an investment account. This will help them gain confidence in managing their personal finance in the future.

One child shows the money they have saved.

7. Make it fun

Learning about money doesn’t have to be boring!

One easy way is to just get a piggy bank and make a game out of saving. Creating a game out of it helps children stay interested in the learning process while still understanding the importance of managing their finances responsibly.

Or try incorporating fun activities and games into your daily routine, such as playing Monopoly, the Game of Life, or teaching them how to budget with a pretend store.

You can also use apps and online programs designed specifically for teaching children financial literacy.

Apps like RoosterMoney or adVenture Capitalist can help make learning about money more fun and engaging. This can be a great way to help kids learn about money in a safe and controlled environment.

Three kids are putting money in a piggy bank as they learn about saving money.

8. Reward progress

Finally, don’t forget to reward progress when your kids make smart financial decisions! Praise their efforts, offer encouragement, and provide incentives for them to reach money-saving goals.

This will help them stay motivated and be more likely to continue using responsible money management habits throughout their lives.

9. Be an example

It’s important for children to see you managing your money wisely. Demonstrate thriftiness by showing them how you compare prices before making purchases and buy in bulk when it makes sense.

Encourage them to shop around for the best deals and use coupons, so they learn to be frugal and stretch their money further.

10. Give them a bank account

Opening a bank account for your children is a great way to teach them how to manage money, such as how to deposit and withdraw money, write checks, and pay bills.

Children should also be taught about the dangers of online banking and how to protect their personal information when using the internet.

11. Get them on a budget

Show them how to create a budget and track their spending, so they can learn the importance of saving vs spending money and sticking to a plan. You can also have them set financial goals for themselves, such as saving for a big purchase.

A simple way of doing this for younger kids would be to use only cash for a day when you go out. If they can physically see the money leaving their hands they will be more aware of how they are spending it.

To get started with a simple budget, use envelopes to divide up cash for essentials and categorize with needs vs wants. You can also help them track their savings goals and show them how much progress they’ve made over time.

12. Help them practice charitable giving

Teach your children the importance of charitable giving, and encourage them to give back to their community or those in need. Showing them how they can help others with their money will help them understand that money is not just for themselves, and that it can be used to make a positive difference in the world.


These are just some of the ways you can teach your children about money and help them develop healthy financial habits for life. With patience, consistency, and guidance, you can equip them with the skills they need to make responsible decisions when it comes to their money.

This article is intended as general educational information and should not be considered legal, tax, investment, or financial advice. The opinions expressed are those of the author and do not necessarily reflect those of the publisher or any other party. Individual circumstances should be taken into account when making financial decisions.

If you have questions related to your finances, please consult a licensed financial advisor.


How do you explain money to kids?

Explaining money to kids can be tricky, but there are a few basic concepts that can help. Start by explaining the difference between needs and wants, and how money is used to purchase goods or services. Teach them about earning money by working, saving money for future purchases, budgeting, and using credit cards responsibly. Finally, show them the importance of charitable giving and how money can be used to make a positive difference in the world.

What is a good age for kids to learn about money?

It’s never too early to start! That said, each child is different and learns at their own pace. Generally speaking, kids as young as three or four years old can start to understand basic concepts like earning, saving, and spending. As they get older, you can introduce more complex topics, such as budgeting and investing.

Why is it important to teach children about money?

It’s important to teach children about money so that they can become financially responsible adults. It will help them understand the value of a dollar, the importance of saving and budgeting, and how to make smart decisions when it comes to their money. Money lessons can also help instill a sense of financial security and freedom, which is essential for developing healthy relationships with money.

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