Teaching Kids About Money: Financial Literacy Tips for Kids of All Ages header image

Teaching Kids About Money: Financial Literacy Tips for Kids of All Ages

You don’t need to create formal lesson plans to teach kids about money. Everyday activities — playing store, shopping for groceries, buying a piggy bank — can help them learn how to be financially savvy.

The average American reported losing approximately $1,389 in 2021 due to financial mistakes.  Learning financial literacy – and how to avoid costly mistakes – needs to start young. But when should you start teaching your children or grandchildren about money? It’s never too soon. Here are some age-appropriate ways to help your kids build financial literacy.

Under 5: Make It a Game

Preschoolers love playing make-believe. Set up a “store” and use play money for children to “shop” with. This will give you the opportunity to talk to them about the exchange of money for goods and services. This interactive money game also introduces them to the idea that there is a cost for their favorite toys and foods — and that money doesn’t grow on trees after all.

Ages 6 to 8: Give Them an Allowance

Offering an allowance is one way to jumpstart financial literacy for kids. According to a survey by the American Institute of Certified Public Accountants, two-thirds of parents give their children an allowance, with the average allowance totaling about $30/week.  Three-quarters of Americans believe getting an allowance teaches children about the value of money and financial responsibility.

Once you start giving your child an allowance, it’s important to talk about the importance of saving. An easy way to teach kids to save money is to encourage them to put a portion of their earnings into a piggy bank. Or you can take them to the bank to open their first savings account. Either way, this will help your child make decisions about spending and understand how much things cost.

Ages 9 to 12: Teach Them to Save for What They Want

Tweens might want to earn extra cash for special purchases by taking on more chores or running a lemonade stand. Teaching them to save for the things they want, rather than expecting the bank of mom and dad to hand over the funds, can help drive home the importance of saving.

“One of the best gifts we can give our children is a solid education on how to manage their money,” said Gregory Anton, CPA, CGMA, chair of the AICPA’s National CPA Financial Literacy Commission.1 “Simply handing money over to a child without guidance is a missed opportunity. By making an allowance a teachable moment, parents will help instill money management skills in their child at a young age that will help prepare them for the important financial decisions they’ll have to make when they’re older.”

Ages 13 to 15: Have Them Do the Shopping

Teens are old enough to make some real-life financial decisions. Give yours the grocery budget for the week, and have them make a shopping list, compare prices and make decisions about meal planning. Or ask them to research cellphone plans and make a proposal for the best family plan based on cost and services. These exercises teach kids crucial lessons about household expenses and budgeting.

Ages 16-plus: Talk to Them Like an Adult

Once teens start working, it’s time to have conversations about “adult” topics such as taxes and college financing, including student loans. At this age, kids can also be introduced to stored-value cards. These preloaded cards, which look like credit cards, can be used in place of cash or credit, and teach teens even more about budgeting, something that will help them throughout their lives.

Take the Next Step

Most parents (92%) believe it is very important for their child to understand finances, but only half (49%) take time each week to teach their child about money.2  Education starts at home – we can help. Talk to your local Farm Bureau agent or financial advisor for more information today.


1-2 https://www.aicpa.org/news/article/childrens-allowance-pay-is-up-amount-saved-alarmingly-low

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