Teaching Kids Money Management With Simple Tricks

31 May 2025

We all want the best for our kids, right? We teach them how to tie their shoes, ride a bike, and even how to say “please” and “thank you.” But there’s one essential life skill that often gets overlooked—teaching kids how to manage money. Yep, you read that right. Money management isn’t just for adults! The earlier kids learn about it, the better equipped they’ll be to handle financial decisions when they grow up.

Now, I know what you’re thinking—"How do I even begin explaining money to a 5-year-old?" Don’t worry; I’ve got you covered with some ridiculously simple tricks that’ll make teaching kids about money fun, practical, and stress-free.

Let’s dive in!

Why Is Money Management Important for Kids?

Before we get into the nitty-gritty, let’s talk about why teaching kids about money is crucial.

We live in a world where financial literacy is as important as math or reading skills. If kids don’t learn how to handle money when they’re young, they might struggle later on with budgeting, saving, or even understanding the value of money. Plus, let’s be honest—do you really want them depending on you for gas money at 25?

When kids learn about money early, they develop habits that stick with them for life. It’s like planting seeds in a garden. You sow the seeds (money lessons), water them (consistency), and watch them grow into financially responsible adults. Doesn’t that sound like a win-win?

Simple Tricks To Teach Kids Money Management

Okay, enough of the why—let’s get into the how. These simple tricks will help you teach your kiddos about money without turning it into a boring lecture.

1. Start With an Allowance (The Classic Method)

An allowance is a tried-and-true way to introduce kids to money. It’s simple: give them a set amount of money each week or month. The trick? Tie it to chores or responsibilities.

Let’s say your child gets $5 a week for cleaning their room. They’ll quickly learn that money isn’t just handed out—it’s earned. And, once they have their own money, they’re more likely to think twice before spending it on yet another glow-in-the-dark slime kit.

But here’s the catch: Make sure to set clear expectations. If they slack on their chores, they don’t get paid. It’s a mini-version of the real world!

2. Introduce The Concept of Saving (Piggy Banks Are Still Cool!)

Remember the classic piggy bank? It’s not outdated, I promise! Giving your child a piggy bank (or any designated savings jar) is one of the easiest ways to teach them about saving.

Here’s a neat trick: Encourage them to split their money into three jars—Save, Spend, and Give. This teaches them to balance their spending, set aside money for future goals, and even think about helping others.

For example:
- Save: A future toy they really, really want.
- Spend: Ice cream from the corner shop.
- Give: A donation to their favorite animal shelter.

This system not only teaches discipline but also gives them a sense of accomplishment when they finally buy something with their own "saved" money.

3. Turn Everyday Activities Into Learning Opportunities

Guess what? A trip to the grocery store can be one of the best money lessons ever. Next time you’re picking up milk and bread, get your kids involved.

Ask them to help you stick to a shopping budget. Give them $20 and let them figure out how to buy a few items without going over. Not only will this make them feel responsible, but it’ll also teach them the value of budgeting in real-life scenarios.

And hey, if they realize buying a giant bag of candy means they can’t afford the chips, lesson learned!

4. Set Goals Together (Because Kids Love a Challenge)

Want to teach your child patience and delayed gratification? Goal setting is the way to go.

Let’s say your child has their eye on a shiny new bicycle that costs $100. Sit down with them and work out a plan. If they save $10 a week, they can buy the bike in 10 weeks.

To make it more tangible, create a "goal chart" with a picture of the bike at the top. Every week, they can color in part of the chart as their savings grow. It’s like a countdown to their dream purchase, and trust me, they’ll feel proud when they finally achieve it.

5. Play Money-Themed Games (Because Learning Can Be Fun!)

Who says learning can’t be fun? Board games like Monopoly and The Game of Life are fantastic for teaching kids about earning, spending, and even the consequences of going into debt (hello, Monopoly jail).

If board games aren’t your thing, there are plenty of apps and online games designed to teach kids about money. These games turn tricky concepts into something kids actually enjoy—and they won’t even realize they’re learning.

6. Be a Role Model (Because Kids Are Always Watching)

Here’s the thing: Kids don’t just listen to what we say; they watch what we do. If you’re constantly swiping your credit card without a second thought or complaining about money, they’re going to pick up on that.

Instead, let them see you making smart financial decisions. Talk to them about why you’re choosing to save for a family vacation instead of buying a new TV. Show them that money isn’t just for spending—it’s a tool for achieving goals.

7. Teach Them About Needs vs. Wants

This one’s a game-changer. Kids often struggle to differentiate between things they need (food, clothes) and things they just want (that super cool spaceship LEGO set).

Next time your child asks for something at the store, pause and ask, “Is this something you need, or is it just something you want?” It’s a great way to get them thinking critically about their spending habits.

8. Encourage Entrepreneurship (Yes, Even For Kids)

Remember the classic lemonade stand? It’s more than just a fun summer activity—it’s a lesson in earning, budgeting, and customer service.

Whether it’s selling lemonade, handmade bracelets, or even babysitting, encourage your child to find ways to make their own money. It teaches them that financial freedom comes from hard work and creativity.

Common Mistakes To Avoid

Now that we’ve covered the basics, let’s talk about what NOT to do:

- Don’t Bail Them Out Constantly: If they blow all their money on candy and don’t have enough left for something important, let them deal with the consequences. It’s a tough love moment, but it’ll stick with them.

- Don’t Make Money a Taboo Subject: Be open and honest about money. The more you talk about it, the less intimidating it seems.

- Don’t Overcomplicate Things: Keep it simple and age-appropriate. A 6-year-old doesn’t need to know about the stock market just yet!

Final Thoughts

Teaching kids about money management isn’t just about dollars and cents—it’s about giving them the tools they need to succeed in life. Start small, be consistent, and make it fun. Whether it’s through allowances, piggy banks, or playful challenges, your kids will thank you later when they’re financially savvy adults.

And remember, it’s never too early (or too late) to start. So grab those piggy banks, set some goals, and turn money management into a family adventure. Who knows? You might even pick up a few good habits yourself!