Financial lessons to teach your kids at every age

According to the 2022 T. Rowe Price Parents, Kids & Money Survey, over half of American parents are reluctant to talk to their kids about money. So if you're struggling with this, you aren't alone. However, getting comfortable discussing money with your children will help them build a stronger financial foundation—and it could also help you develop more positive views about money.     

Here's when to teach kids about money and actionable strategies for doing so, no matter your child's age. 

When to teach kids about money 

You might be surprised to find out you can start teaching your child about money in toddlerhood, and your lessons can carry through to their teen years—and hopefully into adulthood. Here are some tools and strategies for teaching your kid about money at any age.   

Ages 2–5 

They may not yet understand the value of money or why you can't afford an expensive toy at the store, but you can teach younger kids about exchanging cash for goods and services.   

Playing store or restaurant is a fun and engaging way to help toddlers start to understand commerce. You can use real goods like cereal boxes or cans, or opt for a toy cash register and products or foods. Asking about prices can teach kids the concept of costs, even if, at first, they think an apple is worth $100.  

While preschool-age children will enjoy playing store or restaurant, they can also help trace and identify coins or clip coupons before a grocery store or shopping trip. Just ensure you supervise, so they don't put coins in their mouth. 

Ages 6–8 

Kids learn math concepts like addition, subtraction, and money identification in their earliest school years. As you help with homework or reinforce these concepts outside of school, you can bring money into the discussion. Consider having them play with real coins (or play money if you have it), and introduce how to add and subtract money.   

For instance, you might start by counting coins, then have your child add up different combinations of coins to make a dollar. If you have several coins lying around, you could also have your child collect them and bring them to the bank to cash in for paper money.    

It can also be smart to introduce a monetary allowance at this age, and consider discussing the concepts of saving and spending. Your child can earn their allowance by doing chores, or you could simply choose to give them some money each week, allowing them to save for something they really want.²  

If giving an allowance is out of budget, there are still ways to teach the foundations of earning and saving. For example, you might use marbles as currency, and create a system where a certain number of marbles earns treats—like extra screen time or a scoop of ice cream.  

Ages 9–11 

By age 9, your child may understand the concept of money fairly well. Chances are they've watched you pay at checkout countless times, overheard family financial discussions, and browsed for toys and other items online. And if they earn an allowance, they likely have basic knowledge of working for their money.   

Opening a custodial savings account and teaching kids about banking can be smart strategies for kids in this age bracket. Note that your child won't be able to open a new custodial savings account on their own; instead, you'll need to open it on their behalf. You can work together on:  

• Making regular deposits from their allowance into their savings account. 

• Routinely logging into their account online to review their balance and transaction history. 

• Helping them understand what happens to their savings balance if they withdraw money.  

This is also a good time to teach your children about the basics of earning interest. Explain that the bank gives account holders a special reward for saving money, and show them how much interest they earn on their balance in a given month.³ 

Ages 12–15 

Kids in this age bracket are old enough to start learning about investing using a kids app or a custodial account. Introduce the concept of investing, what it entails, how to do it, and what the purpose of investing is. Explain that you can earn or lose money on investments, and discuss the risks of common investments like company stocks, exchange-traded funds (ETFs), and bonds.  

By using investment tools while they're still under your roof, you can instill in them the importance of putting money away so that it works for them in the future. This could give your child an edge when they enter the workforce as a young adult and start putting money into a workplace retirement account.⁴ 

Ages 16–18 

Many teens start driving at 16, so it's an ideal time to teach your child about real-life expenses. For example, by walking them through the true costs of car ownership—including monthly loan payments, insurance, gas and maintenance—they can have a better understanding of how to budget and save for a car of their own some day.⁵  

If your teen doesn't drive or have a car, you can teach similar concepts by having them contribute to their phone or phone plan. Though many kids share their parents' accounts, having to pay a set amount each month puts their budgeting knowledge into practice. You could even siphon that money into a separate account and give it to them after their high school graduation.   

Besides applying budgeting concepts to real life, this is a great age to teach your kids about credit score. Start by explaining what building credit means, why it's important, and how to do it.

The bottom line 

No matter your child's age, you can start teaching them important financial lessons, either through play or real-life activities. Teaching your child about money helps build financial literacy and understand their financial values, which can give them an edge when they become adults. Ideally, they'll carry the knowledge you've given them about saving, budgeting, and investing through their lives, making them more likely to reach their financial goals. 

1. Consumer Financial Protection Bureau. “Financial well-being: What it means and how to help.” 

2. Greenlight. “Average allowance by age for kids and teens.” 

3. Consumer Financial Protection Bureau. “What is the difference between a loan interest rate and the APR?” 

4. Consumer Financial Protection Bureau. Discovering the benefits of investing early.” 

5. Consumer Financial Protection Bureau. “Budgeting: How to create a budget and stick with it.” 

6. Consumer Financial Protection Bureau. “What is the difference between a credit report and a credit score?”