We aren’t born with good money habits—they’re taught and practiced, just like any other good habit. And the sooner you start building those habits, the easier it is to keep them going long-term.
By nature, kids’ young minds are more open to receiving new information than adults—so it’s important to give your kids the tools and foundations they need to become financially confident adults early on.
Brian Ford, head of financial wellness at Truist, recommends starting with these four lessons—especially for the 4 – 12 age range:
1. Money comes from work
The video games and treats your kids love don’t just magically appear—you have to pay for them with the money you earn at your job. When a child learns this, it can be exciting—they‘ll naturally be curious about working as a means to get what they want.
Chores are a great way to help your kids learn that you can earn money from work, though Ford chooses to keep basic chores—like keeping your room tidy or picking up your toys—separate from his kids’ allowances.
“We don’t want our children to think that they can just stop doing their chores simply because they no longer want or need the money,” Ford says.
Ford says you can use bigger chores, like cleaning out the garage, as opportunities to let your kids earn some extra compensation. Learning gratitude, he says, is another perk of working for a wage—your kids can appreciate the results of working for what they have and become more grateful for the work you do. Plus, it can motivate them to work harder for that next toy or treat.
2. Spending can teach powerful lessons
Finance for kids isn’t always about saving. Yes, kids need to save for things they want, but when it’s time to buy those things, they can celebrate! Reinforce the idea that because they worked hard, they earned that new LEGO set. They’ll feel proud and motivated for their next goal.
Spending on the right things—things you saved and planned for—can feel good. And on the flip side, spending on the wrong things can be a valuable lesson to learn early on. Let’s say your kid is saving up for a bike. They’re really excited for it, but one day in the store, they see a new game they want to spend their money on. Gently remind them that buying that game will make it take longer to reach their bigger long-term goal of purchasing the bike. If they decide to get the game anyway, they may later regret having less money for the bike, which gives them a chance to learn from the consequences of their choices.
Teaching kids about money and how to spend on what matters most is vital. You can help them avoid learning financial lessons the hard way as an adult.
3. Saving can be fun
Saving money means your child is on their way to getting something they really want. Have your child write down a specific savings goal—this will help them focus and get in the habit of setting goals, which they’ll need throughout other aspects of life.
Make starting to save fun by letting them pick out a piggy bank that matches their personality. When they deposit actual coins and dollars, they’ll see how their hard work adds up—and they’ll take pride in their piggy bank.
Success with saving requires delaying gratification. If they get off track, you can remind them of their written goals.
And when the time is right, open a bank account with them. Especially for older kids, this can help them see how their money and interest grows. It also provides you an opportunity to teach them about advanced money topics, like credit and compound interest.
4. Giving feels good
Most children learn about giving by watching others give or through a natural desire to help people. You can set an example by talking about how you give and why it’s important that we help others. Get the whole family involved: You can set a Saturday aside to do volunteer work or write letters to residents in retirement homes, or you could take a trip to the bank to exchange their coins for dollars to donate.
Encourage decisions on spending, saving, or giving. You may even look into buying a piggy bank with separate chambers and labeling each one. Giving doesn’t always require monetary donations, but when it does, involve your kids in the process. This will help them feel connected to the good they do.
While these lessons may be simple, they still need to be reinforced. You can use this checklist to help your kids understand and build great money habits:
In addition, here’s an activity sheet your kids can use to put their lessons into practice:
These money lessons to teach your kids can help them develop a solid foundation for their future relationship with money. Start small, letting your kids hold physical dollars and coins, and then help them grow into financially confident teens and adults.