Teaching Your Children About Finances (By Age)

It’s never too early to start teaching your children about money. Here are some age-appropriate ways to do so:

Ages 3-5

While kids at this age may not understand the value of money, they should understand the need to pay for merchandise. Kids learn from shared experiences, so include them in the grocery trip to help them understand this process. To make it more tangible, use cash.

A challenging lesson for a child in this age bracket is learning that something must be given up to buy something. So give your children a dollar (or a couple) to spend; let them experience handing over this money in order to buy an item.

Ages 6-10

This is a good time to explain to your children about making wise choices with money. Have them set a goal, such as buying an inexpensive toy. Use a savings jar to provide a visual and increase their excitement level as they see the amount of money “grow”. It also helps them deal with the issue of instant gratification. You also might consider visiting one of our branches with them so they can see the benefits of saving money here rather than just at home. We offer savings accounts just for children—take advantage of these.

But how should children “earn” money? You could give an allowance or provide chores for them to earn money. Experts don’t agree on which option is best, so pick whichever one you feel most comfortable doing.

One activity you could do during this age is to start getting them involved in decision-making while shopping: Is this something we need or want? Do you think we can buy this cheaper elsewhere?

Ages 11-13

This is a great time to introduce the concept of a budget. Have your children help you as create a budget and list for the grocery store or back-to-school shopping. As you shop, ask for feedback and suggestions on ways you can keep on budget.  

It’s a good time to teach about comparison shopping. Have your child look at the labels and compare the bulk amount per cent. Have them compare the cost differences between a brand name and a generic brand of the same item—to see which one is better.

This is also the age when kids start noticing what their friends have, such as cell phones or the latest shoes. How can you teach your children to be content with what they have? Perhaps volunteer work or having them donate items they’re not using anymore.

Ages 14-18

At this stage, college and career choices are looming, so have discussions about different jobs they might be interested in and include talks about responsibilities and income. Explain about deductions, such as taxes, Social Security, and insurance premiums.

 If your child doesn’t have this already, consider opening up a checking or savings account—or both. While neither can establish credit, they can show your child how to handle his or her finances.

Have discussions on how to pay for college: parent contributions, after-school jobs, financial aid, scholarships, and grants. Have your children research different career paths (educational requirements and salary prospects) as well as costs for different universities. Then have them review how much student loan debt could affect their lifestyles after graduation. They can also take advantage of the modules in our Financial Educational Guide - Click Here.