How to Teach Your Kids About Money: A Comprehensive Guide

Learn how to guide your kids through each stage of financial literacy development.

June 3, 2024

Introducing your children to the world of money management at a young age is a valuable investment in their future financial success. By integrating fun and educational activities into their learning experience, you can help them develop essential money skills that will serve them well throughout their lives.

This article is sponsored by Apple Federal Credit Union

From recognizing different forms of currency to making informed decisions, here’s how you can guide your kids through each stage of financial literacy development.

Ages 4–6: Lay the Foundation

At this age, children are curious and eager to learn. Take advantage of their natural curiosity by introducing them to basic money concepts through interactive play and exploration. 

Teach Coin Recognition

Help your child identify and differentiate coins of various values. Use real coins during playtime to make learning hands-on and engaging.

Let Them Earn Money 

Introduce simple tasks that your child can complete to earn money, such as helping with household chores or picking up toys. This teaches them the value of hard work and earning rewards.

Encourage Saving Habits 

Encourage your child to set aside a portion of their chore money or gifts in a piggy bank, then move it to a Savings account. This teaches them the importance of saving for future needs and wants.

Establish Needs vs. Wants 

Teach your child the difference between essential items and things they want. Use everyday scenarios to illustrate this concept, such as choosing between buying groceries or toys. 

Recommended Tools and Games 

  • Play Peter Pig’s Money CounterThis interactive game helps children ages four to seven learn coin sorting and counting skills while having fun with Peter Pig. Download on Android or iOS devices. 
  • Play pretend: Use imaginative play to simulate real-world financial scenarios, such as playing store or setting up a pretend lemonade stand. This fosters creativity while teaching valuable money management skills. 
  • Open an eXtras Student Savings accountOnce your child begins receiving money, they need a place to put it. Our eXtras Student Savings account is perfect for kids of any age. There are no monthly service fees or minimum account balances, and parents have complete access to the account as joint owners.

Ages 7-11: Building on Basics

As children grow older, they can grasp more complex financial concepts and begin to apply them in practical situations. Use this stage to introduce topics like budgeting, comparison shopping and responsible spending habits.

Give Them an Allowance

Give your child a weekly or monthly allowance and encourage them to allocate it wisely. Teach them how to budget for different expenses, such as saving, spending and giving.

Begin Tracking Purchases

Help your child keep track of their spending by maintaining a simple budget sheet or using budgeting apps designed for kids. This promotes accountability and awareness of where their money is going.

Teach Comparison Shopping

Involve your child in shopping trips and show them how to compare prices and identify value for money. Discuss the importance of making informed purchasing decisions.

Avoiding Impulse Buying

Teach your child to think critically before making impulse purchases. Encourage them to pause and consider whether they truly need or want the item before buying it.

Recommended Tools and Games

  • Guardians of the Galaxy: Rocket’s Powerful Plan: This comic book series, developed in collaboration with Visa and Marvel, teaches kids about saving money and distinguishing between wants and needs through the adventures of the Guardians of the Galaxy.
  • Avengers: Saving the Day: Explore financial literacy concepts with Marvel’s iconic superheroes in this engaging comic book series. Available online in multiple languages, it covers topics like saving, banking and budgeting.
  • Open a 12-Month Starter Certificate: In addition to a Savings account, Certificates are an exceptional tool to help kids save and teach them the value of investments and delayed gratification. Open a 12-Month Starter Certificate for only $50 and teach them about dividends and Annual Percentage Yield (APY.)

Ages 12-17: Preparing for Adulthood

As pre-teens and teenagers approach adulthood, it’s crucial to equip them with the knowledge and skills necessary to navigate complex financial decisions on their own. Focus on practical applications of money management, such as earning, saving and budgeting for long-term goals.

Find a Job

Encourage your teen to pursue part-time jobs or summer employment to earn their own money. This experience instills a strong work ethic and provides valuable financial independence.

Set Financial Goals

Guide your teen in setting realistic short-term and long-term goals, such as saving for a car, college tuition or an emergency fund. Help them create a plan to achieve these goals through budgeting and saving.

Help Them Understand Credit

Teach your teen about the responsible use of credit cards and loans, including the importance of building good credit and avoiding debt traps. Emphasize the concept of interest rates and how they affect borrowing costs.

Protect Them Against Fraud

Educate your teen about common scams and identity theft risks, emphasizing the importance of safeguarding personal and financial information online and offline.

Recommended Tools and Games

  • Financial Football: This interactive game challenges players to answer financial questions to earn yardage and score touchdowns. Download for free on iOS devices.
  • Plan’it Prom: Help your teen plan and budget for prom expenses with this handy app that tracks spending and ensures they stay within their budget for the big event. Download for free on iOS devices.
  • Open an eXtras Student Checking account: When teens start making money, they start spending it too. Our eXtras Student Checking account lays a solid foundation for smart money management with no monthly fees or minimum balance requirements. Plus, they can access their paycheck up to two days early* with direct deposit!

Ages 18+: Continuing Financial Education

Even as young adults, your child still needs ongoing financial education to build a secure future. It’s essential to provide resources and tools that empower them to make informed decisions and manage their money effectively.

Buy a Car 

Buying your first car is a big financial step. Our First-Time Auto Buyer Loan helps those with little to no credit buy their first vehicle. Use our online calculator to determine how much car you can afford based loan term and the amount needed for a down payment.

Build an Emergency Savings

Use our calculator to see how much you should set aside each month to build an emergency fund that covers essential expenses in case of unexpected events like job loss or medical emergencies. 

Start Budgeting 

Track your daily expenses and income to create a realistic budget that aligns with your financial goals. Use budgeting apps or spreadsheets to monitor your spending and identify areas for saving or cutting back.

Save for Goals 

Whether it’s a vacation, home purchase or retirement, use savings calculators to determine how much you need to save each month to reach your financial goals within a specified timeframe.

Recommended Tools and Activities 

  • Research family members’ jobs: Encourage your teen to research and compare the careers of family members, exploring the education and training required for various professions. This helps them understand the connection between education, career choices and financial success. 
  • Online calculators: Explore Apple FCU’s suite of online calculators to analyze various financial scenarios, from buying a car to saving for retirement. These tools provide valuable insights into your financial situation and help you make informed decisions. 
  • Apply for an eXtras Student Credit CardA credit card is a powerful financial tool that teaches young adults how to spend only as much as they have. When used properly, it can also help build a healthy credit profile, which can assist them later on when securing loans and mortgages.

Teaching your kids about money management is an ongoing process that evolves as they grow and mature. By incorporating fun and educational activities into their learning journey, you can equip them with the knowledge and skills they need to make responsible financial decisions and achieve long-term success. 

*The timing of early pay Direct Deposit varies based on the payment file submission from the payee. Apple FCU may make payroll and other electronic transfers available when the payment file is received, up to two (2) business days earlier than the scheduled payment date. Please note that funds are not available for you to spend until they are reflected in the AVAILABLE BALANCE. You should not rely on early pay Direct Deposit to satisfy the needs of scheduled bill or loan payments, or any other date-sensitive financial obligations. Apple FCU is not responsible for overdraft fees resulting from transactions that occur prior to funds posting.