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The research is in: 5 ways to teach kids about money

Set your kids up for success now, so they can handle money better later

What does it take to get your child ready to manage money? If only it were as easy as selecting from a list of “successful” first names drawn up by a UCLA researcher.1 The research shows particular first names come with a preconceived notion of respect and prosperity. (And if you’re wondering, the top names are Jacqueline, Morgan and Elizabeth for girls, and Steven, Ross and Christopher for boys.)

Let’s face it: No matter what you name your kid, there’s no guarantee of fame or fortune. But you can teach them money lessons that should help you all sleep better. Studies show children can get the concepts of earning, spending, and saving as young as age seven.2

Here are five fresh ways to teach your kids about money, so they hopefully handle it well in the future.

  1. 1. Play time

    Father shows young son financial app on iPad

    Children under age eight now spend an average of 48 minutes a day on mobile devices, accounting for around one-third of their total daily screen time.That number only increases with age. Make better use of that captive screen time by loading up their devices with kid-friendly financial apps and websites. For example, the DoughMain Financial Literacy Foundation has money game platforms including “The Fun Vault” and “Sand Dollar City” that teach children a variety of age-appropriate financial concepts.

  2. 2. Price checks

    A child in car with his parents is pointing out window

    You spend a lot of time each day commuting between school, sports and extracurriculars. Instead of playing “punch buggy” or license plate bingo, have your children look for prices along your route. Turn each spotting into a series of fun money math problems. For example, if gas is $3 per gallon, how much will it cost to fill up a 10-gallon tank? Can your children spot a cheaper price at another gas station? They may not realize it, but they’re learning real-life examples of budgeting and price shopping.

  3. 3. Allow me

    A child placing a dollar into a money jar labeled donate, next to a money jar labeled save

    According to a survey by the RoosterMoney allowance tracker, kids ages four to 14 received $454 on average in annual allowance in 2017: That’s around $8.74 a week.Instead of paying one weekly or monthly amount, have them divide that chunk into three “accounts” for spending, saving—and giving. Explain how your family does the exact same thing every month, splitting your paycheck between monthly necessities (housing, utilities, groceries, etc.) and savings for larger items like a car, vacation, or their college education.

  4. 4. Supermarket savings

    A daughter shopping for produce with her mom

    Yes, it’s easier and faster to zip through the grocery store on your own. But then you’d miss out on a bounty of lessons for your children to learn smart purchase practices. Play price detective with them: What’s the price difference between the name brand and store brand? Is a bigger box always a better buy? Does a coupon make an item cheaper than its competitors? Offer to deposit the savings they find into their piggy bank. They’ll learn that each decision results in real dollars and cents that they can save and put toward other needs.

  5. 5. The long game

    A child practices guitar for her goal of being a musician

    Provide incentives for your children to save their allowance and birthday money toward a long-term goal rather than use it for short-term gratification. For example, if they want to buy the latest game console, print a photo of their goal as motivation and put it where they can frequently see it. Create a chart they can fill in as they approach their goal. For every month they save toward that goal without dipping into their piggy bank, offer to contribute a certain amount—say, $5 or 5%—toward the purchase price.

What do all these lessons have in common? They bring the subject of money out into the open. By making your children comfortable and familiar with money management at an early age, they can develop the financial skills that will serve them well throughout the rest of their life.