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Written by Carrie Johnson (former SDSU Extension Family Resource Management Specialist).

We try to teach our kids life skills and to use good manners, but teaching them financial facts can be difficult. The best lesson is taught by being a good role model. Financial education has been introduced into school systems, but research shows that youth learn most of their financial skills from watching their parents.

“Show and tell” while you manage your own money. 
If you expect your children to become responsible with their money – and yours – practice show them the proper way to save, spend and share money. Take them on shopping trips, to the bank, plus teach lessons around the house. 

Kids are eager to learn, so to put them on the right financial path, parents need to be open and honest about money, demonstrate better financial behaviors and spend the time teaching financial lessons the way they do other skills.

  • Take advantage of everyday teachable moments – trips to the grocery store, attending a sporting event, getting money from the ATM, and planning family vacations are just a few examples of opportunities for parents to reinforce financial lessons. Discuss what makes some items “too expensive” and others “good buys”.
  • Explain how much things cost and how you have to earn money to meet buy things.  Point out that money is used to buy food and clothes and it pays for things such as your home; the car and their toys.
  • Allow older children to see your utility bills and explain that money is used to pay for the use of electricity.  Show them how they can play a part in reducing the costs of electricity.  It is an effective medium to teach the kids that they can conserve and help the family save money.
  • Let them know about setting money aside for emergencies, vacations, family holidays and gift giving.
  • Take them to the bank and explain in simple terms how banks and credit and debit cards work. Note the variety of services they provide. By letting them look at the bank statement, you give them the clear idea of savings in the bank and how interest works. 
  • Help your child start a savings or investment account. They will enjoy saving money in a piggy bank, but around age eight, help them open a small savings account.
  • If you are able, give an allowance. If used as a teaching tool and not as a giveaway, an allowance can be one of the best ways to teach kids, even as young as five or six, about money management. It also allows children to experiment with money management and learn from their mistakes without losing too much in the process. Help them decide how much should be spent, saved and shared. 

These ideas can help you become a secure financial example to children. Don’t try to teach it all at once. Use teachable moments in your daily life. How you go about it will depend on the age of your children. You can start teaching children about money as early as two years old. Remember to be the best example you can be.


Useful Websites

  • is a safe place to learn and play for kids, teens and grown-ups. It provides a variety of resources and ways to teach kids lessons like spending and saving. It is the U.S. Governments official web portal.
  • The Mint this site provides tools to help parents and educators teach children to manage money wisely and develop good financial habits, the building blocks for a secure future.
  • eXtension provides a wide variety of Extension research based articles on many topics to learn how to teach children of all ages about money.
  • Learn the basics of saving, investing, and planning for you and your loved ones’ futures, and also access tools to help make your kids more financial savvy.
  • Jump$tart is a national coalition of organizations dedicated to improving the financial literacy of pre-kindergarten through college-aged youth by providing advocacy, research, standards, and educational resources. Learn about improving your basic financial management skills.
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