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Teaching Kids About Money Management

Tips to help parents teach kids about money management, including saving, earning, spending, budgeting, and more.  

It’s an important lesson for children to learn, and it can often make a big difference for their financial future. Teaching your kids about money management takes time and patience, but as a parent, it’s your job to help prepare them. For parents with joint custody, it’s important to be on the same page with financial literacy, so you don’t send mixed messages to your kids.

There are several ways you can teach money management and keep lessons consistent

Financial literacy needs to start young. A 2018 National Financial Capability Study found that 49% of people who received more than 10 hours of financial education report spending less than they earn, compared with just 36% among those who received less than 10 hours. Here are some ways you and your co-parent can teach your children about money management based on their age:

Preschoolers and kindergartners: Teach your children about saving money. Try Using a clear jar to save. Piggy banks don’t give kids a visual of how much money they have. Using a clear container allows children to physically see their dollar bills and change, making it easier for them to understand when that money is gone. If your relationship with your co-parent allows, this can be a great item to share between households, so your child’s savings stays consistent.


Grade schoolers: Teach your children that money is earned and spent. Grade school is a great time to let your kids earn an allowance. If possible, you and your co-parent should set the parameters for how the allowance can be earned. Whether you decide to give your children money for chores, grades, or going above and beyond, it’s important for both of you to be on the same page. If you need ideas on how to get started with an allowance, check out our article called How Can Kids Earn an Allowance?

Grade school is also a good time to teach your kids about how money is spent by telling them about opportunity cost. You can do this by explaining that if they buy “this game”, they won’t have enough money for “that shirt.” At this age, your children are old enough to start learning that they will have to make decisions about how to spend their money.


Middle schoolers: Teach your kids about income and budgeting. You and your co-parent should take time to discuss how jobs relate to income. It’s important to explain to your kids how working correlates to a paycheck, and how different financial responsibilities such as taxes, social security, and insurance are deducted.

This is also a good age to teach children how to budget. Taking your kids to the grocery store with you and explaining how you will purchase all the items on your list for a certain amount can help display how budgeting works.


High schoolers: Teach your teenagers about college savings, bank accounts, and credit cards. By this age, financial planning should become a very real part of your child’s life. It’s important for you and your co-parent to discuss these financial matters as it relates to your child as well. For example, if your teen is planning to get a summer job to earn money for college, you and your co-parent should discuss this ahead of time.

Setting up a bank account for your teen is another logical next step. This helps take the money management skills you’ve been teaching your child all along to the next level. If you and your co-parent use different banks, it’s important to discuss which bank the account will be set up through, and who will have access to it. You and your co-parent should also take time to talk to your teen about credit cards, including how fees, interest rates, and credit scores work.


Setting a good example is also important

From the time your child was born, you and your co-parent have been making financial decisions, both together and apart. Setting a good example for your kids with your own money management and financial planning is key. If you and your co-parent struggle with this, check out our article on Money Conversations to Have with Your Co-Parent.

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