When and How to Talk to Your Kids About Money
Financial Literacy to Teach Children About Money by Age
Most kids leave home knowing more about parallelograms than how to budget. That’s not a parenting failure—it’s a cultural one. But if we want to raise adults who don’t crumble at the sight of a bill, it helps to start early.
You don’t need a perfect system or endless free time. You just need to weave money talk into everyday life. It’s easier than you think, and your kid doesn’t have to become a Wall Street prodigy—just a person who understands that money is power.
(Psst—if you’re planting seeds for long-term financial power, check out the How to Build Generational Wealth series.)
In this article:
Ages 3–5: Start With the Basics (Yes, Really)
Ages 6–9: Earning and Saving Awareness
Ages 10–12: Reality Check + Digital Dollars
Ages 13–15: The World Gets Bigger (So Should Their Financial Mindset)
Ages 16–18: Adulting Practice Ground
You Don’t Need a Finance Degree—Just Guts and Google
Ages 3–5: Start With the Basics (Yes, Really)
You don’t have to wait until they’re doing math homework to introduce money. Even toddlers can start to grasp that things cost something and money doesn’t just fall out of the sky. Keep it concrete, short, and tied to everyday life.
My two-year-old loves playing store. We use wooden coins (from this Montessori play kit) to pay for toys. Sometimes, he tries to trade a lesser toy for another, but he understands that some sort of trade is required for the game. It’s simple, but it lays the foundation: things have value.
What they can handle:
Understanding that money is exchanged for goods.
Identifying coins and bills.
The difference between “want” and “need” (start here and never stop).
That money runs out if you keep spending it.
How to teach it:
Play “store” at home with pretend or real coins.
Let them hand over cash at checkout.
Narrate your choices: “We’re not buying that today because we’re saving for something else.”
Ages 6–9: Earning and Saving Awareness
This is the age when they start asking for everything—ice cream trucks, vending machines, random plastic junk. Instead of repeating “we can’t afford it,” help them understand how decisions shape what’s possible.
I remember a friend telling me her daughter cried over not getting some $15 plushie at the mall. She started giving her $5 a week in allowance for doing her chores. It wasn’t long before the kid realized $15 means saving up.
What they can handle:
Earning money through chores or extra tasks.
Saving up for a toy instead of instant gratification.
Seeing money grow (hello, piggy bank or clear jar).
Introduction to banks and debit cards.
How to teach it:
Give a consistent allowance with expectations (not rewards for existing).
Introduce a 3-jar system: Spend, Save, Give.
Open a youth savings account and show them the balance.
Take out a small “parent tax” to introduce taxes—and fairness.
Related: Best Ways to Teach Kids Responsibility And How to Make Chores Fun
Ages 10–12: Reality Check + Digital Dollars
By now, they’ve got big opinions and a budding awareness of what money can do. This is the “why can’t I just have a phone?” stage. They’re old enough to notice what things cost and to feel the consequences of blowing their money too soon—and that’s a lesson best learned while they’re still under your roof.
A friend of mine got a surprise $200 bill thanks to her daughter’s Minecraft obsession. The credit card was linked to her Apple account, and she had no idea her kid could just tap and buy on the tablet. By the time the statement came in, her daughter had stacked up enough in-game purchases to fund an actual hobby. That was the day she learned digital money feels fake—until it drains your real bank account.
What they can handle:
Understanding how debit cards, apps, and online purchases work.
Budgeting for short-term goals.
Price comparisons and “best deal” thinking.
Why everything that says “free” usually isn’t.
How to teach it:
Give them a prepaid debit card like Greenlight or Step.
Let them manage a budget for a birthday gift or school shopping.
Compare prices online together and calculate savings.
Explain in-game purchases with real-world consequences.
Related: The Best and Worst Expenses to Pay With a Credit Card
Ages 13–15: The World Gets Bigger (So Should Their Financial Mindset)
Teenagers are cynical, dramatic, and occasionally brilliant. Use it. They’re ready to learn about compound interest and real-life consequences, especially if it helps them avoid being broke, embarrassed, or stuck living with you forever.
When I was around 14, my mom sat me down with a paper check register and taught me how to balance a checkbook. Yes, it’s ancient history now, but it drilled into me that you can’t spend money that isn’t there. Watching balances drop in made a bigger impact than any school worksheet ever could.
What they can handle:
Opportunity cost: spending now vs. saving for better later.
How compound interest works (blow their minds with calculators).
The dangers of debt (and how ads manipulate desire).
Tracking income/expenses—basic budgeting.
How to teach it:
Use real examples from your bills or budget (edited for drama).
Have them create a mock budget for something they want (a phone, gaming setup, etc.).
Show them what happens when you carry a credit card balance.
Watch a documentary about consumerism or fast fashion together and talk about it.
Related: The Psychology of Money: Why You’re Probably Screwing Yourself Without Even Knowing It
Ages 16–18: Adulting Practice Ground
They’re almost out of the house or they think they are. Before they leap, hand them a parachute: real knowledge. Make this the training ground for future independence, because they’ll either learn now or in collections court.
At 17, I had no clue how taxes worked or how to read a pay stub. No one warned me that student loans weren’t “just another bill.” Don’t let your kid be that clueless. Let them help with real budget planning. Walk them through FAFSA. Talk about what things really cost. Be brutally honest—this is the last safe zone for it.
What they can handle:
How credit scores work (and why they matter).
Taxes, pay stubs, and W-2s.
Investing basics (stocks, mutual funds, retirement accounts).
Planning for college or trade school costs.
How to teach it:
Have them do their own teen taxes (with help).
Set up a custodial investment account or Roth IRA if they have income.
Assign a budget challenge: one week of grocery shopping under $X.
Talk real numbers about student loans, interest rates, and career ROI.
You Don’t Need a Finance Degree—Just Guts and Google
You’re already ahead of the game just by caring. You don’t have to be perfect, just present. Kids learn what they see. If you’re paying down debt, saving on a tight budget, or investing a little each month—they’re watching. Start small. Speak clearly. And remind yourself: broke cycles don’t break themselves.
