How to Teach Children to Manage Money: 11 Steps - MakeSureHow
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Teach siblings to work together toward mutual money goals.

Your child may be too young to ride a bike, tie her shoe laces or cross the street on her own, but she's never too young to learn about managing money. The concept may seem like an overwhelming — and maybe, boring — one. But you can teach your child how to manage money in a fun environment that fosters a healthy understanding of goal setting, savings and long-term financial planning.


  1. 1
    Incorporate money management lessons into playtime with a simple, but fun, supermarket game. Use fake money, play food and a cash register, and have your child take turns being the shopper and cashier. If your little girl is more into fashion than food, take the play food off the shelves and take a pretend trip to the costume store instead.
  2. 2
    During your real-life trips to the grocery store with your child, explain why you use coupons and buy sale items. Have your child help you sort coupons at home and then search for the items once you get to the store. In short, involve her in the process — hands-on lessons are the best ones.
  3. 3
    Help your child learn the difference between needs and wants. Help her make a list of items, and then have her divide them into categories of wants and needs — she needs to eat; she wants a new baby doll. You can also help her make a wish list for very special items, like that real-life fairy castle she's been dreaming of. Understanding the difference between needs, wants and wishes will help her with future decisions.
  4. 4
    Create a goal chart. Help your child choose a goal regarding her needs, wants and wishes. Help her figure out the amount of time — or money — she'll need to accomplish her first goal. Keep the goal easily obtainable, especially in the beginning. Making a goal of saving her entire year's allowance for a new motorized kid's car will be overwhelming to your child. She needs to set a goal and reap the rewards of her good planning, although she hasn't exactly developed perfect patience skills. You may want to start with a special treat — ice cream or a small toy — after setting an easily obtainable, short-term goal that doesn't take much patience. Remember, your goal is to teach her the concept of managing not just money, but goals.
  5. 5
    After a little time has passed and you see that your child is grasping the concept, make some provisions to your goal chart. For example, add a second column for a longer-term goal and teach your child to set aside a portion of money toward that goal. If she's getting $5 a week for her chores, help her set $2 aside each week for a couple of months toward that little play tent she wants. She still has $3 each week to put toward short term-goals. This will teach her the concepts of both immediate and delayed gratification.
  6. 6
    Use a piggy bank to make the concept of saving money a tangible one. You can pick up an actual piggy bank from the store or teach your youngster about frugal living by turning an old shoe box into her very first savings box. Decorate the box with construction paper, stickers and crayons, and make a slit in the top for deposits.
  7. 7
    Pay allowance in denominations that encourage savings. If she's getting $5 a week for allowance, give her five $1 bills. That will make it easier for your youngster to put a few of the dollars in savings while bringing along a buck for a candy bar on your next shopping trip.
  8. 8
    Teach your child the importance of keeping receipts. While receipts don't mean much to a preschooler, holding onto the receipts will become a habit if you teach her to consistently do it. Designate an envelope that stays in the savings box. It'll be fun for your youngster to look back on all her purchases as her reading skills develop.
  9. 9
    Guide your child, but let her make the final decision on spending — within reason, of course. She will learn from her good and bad choices. Better to waste her money on a candy bar now and miss out on that stuffed animal than to shop like a diva when she's older and miss out on paying rent.
  10. 10
    Teach your child to make comparisons. Each time she sets a goal, have her think about two or three other things she could get instead. Use pictures to make the activity more tangible. Does her original goal surpass its alternatives?
  11. 11
    Relax. It's obvious you're a wonderful mother if you're already looking out for child's financial future. Have fun teaching her money management skills and enjoy that extra bit of one-on-one time you get while doing it.

Things You'll Need

  • Fake money
  • Play food
  • Toy cash register
  • Costume apparel (optional)
  • Coupons
  • Goal chart
  • Shoe box
  • Craft supplies

Article Info

Categories: Education and Communications

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