Why talk to kids about money?

If kids learn about money, income, budgeting, saving, and banking in the early stages of their childhood, they will be better equipped to make good financial decisions as teens and young adults. You can begin by teaching elementary schoolers financial literacy concepts like wise spending, goal setting, and planning.

Talking about income

You can explain income to your young kids as “money you earn from working”. Kids could earn allowances to help teach them the concept of income. This is also a great time to teach your kids the difference between income they earned and money that they borrow.

Here is a free and printable money sorting activity.

Talking about saving

Young kids can learn about saving by having a piggy bank or savings jar. They can create a goal for how much they want to save or what item they want to save up for. When the piggy bank or jar is full, count it together and shop with the amount in mind, walking them through the process.

Here is a free and printable savings goal worksheet.

Talking about budgeting

A lifelong skill that kids can learn early on is how to create and stick to a budget. You can create an example budget to show your kids income and expenses. After they understand the basics, you can create a budget for your next grocery shopping trip. Take your kids with you, along with the budget and a grocery list. Talk about the prices of items and try to stay within the budget together. You can teach them the concept of discounts by using a coupon or showing them an item on sale. Walk your kids through this decision-making process.

Here is a free and printable budget worksheet.

Talking about banking

Try explaining to your kids what a bank is and how they work. Below is an example for how to share this without using complex banking terms.

• A bank is a business that keeps your money safe.
• You can borrow money from a bank, but you have to pay it back.
• You can get your money out of a bank whenever you want to spend it.

Take your kids with you to a bank and walk them through the process of you making a deposit or withdrawal.

Other ideas to teach your kids about money:

• Reading money or business themed books.
• Playing board games involving money like Monopoly or Pay Day.
• Set up a play store with fake money and household items.
• If your child gets birthday or holiday money, create a plan for how they want to spend it and make sure to stay within budget.

Teaching your kids about money can seem intimidating at first. It is important to remember that teaching these concepts early on will reward both of you in the future. Don’t forget to mention how important smart money management skills are and have your kids practice these skills whenever you can.

We have free downloadable printouts to help you talk to your elementary schooler about money available here:

• Sorting Activity
• Savings Goal Worksheet
• Budget Worksheet: My Weekly Budget