Teaching Kids About Money: Age-Appropriate Lessons for Every Grade
Back-to-school season brings more than just new notebooks and pencils – it's the perfect time to introduce your children to financial lessons that will serve them for life. As families prepare for another school year, many parents wonder when and how to start teaching their kids about money. The answer might surprise you: it's never too early to begin.
Research from the University of Cambridge reveals that children absorb and establish money habits as early as age 7, while recent studies show that children as young as five show spendthrift and tightwad tendencies, independent of parental behavior. With such early financial personality development, parents have a crucial opportunity to guide their children toward healthy money habits.
Unfortunately, 47% of US adults continue to give their personal finance knowledge a grade of "C" or worse, and financial literacy in the US has hovered around 50% for eight consecutive years. By starting early with age-appropriate lessons, we can help the next generation achieve better financial outcomes.
Preschool and Kindergarten (Ages 3-5): Building the Foundation
At this young age, children are naturally curious and eager to learn through play. Focus on making money concepts tangible and fun.
Key Concepts: Money is used to buy things, different coins have different values, and we must make choices about purchases.
Try These Activities:
Replace traditional piggy banks with clear jars so children can visually see their money growing. When shopping, let your preschooler hold a few dollars and hand them to the cashier – experiencing the lesson in real time will have more impact than a lecture.
Create a simple "needs vs. wants" game using magazine pictures. The first lesson to teach kids is the difference between a want and a need. Help them sort items into "need" piles (food, clothing) and "want" piles (toys, candy).
Elementary School (Ages 6-10): Expanding the Basics
Elementary-aged children can handle more complex concepts and begin taking on small financial responsibilities.
Key Concepts: Earning money through chores, setting savings goals, basic budgeting, and understanding that money is limited.
Try These Activities:
If you give an allowance, tie it to age-appropriate chores. GoHenry's research shows parents are paying an average of $5.06 from age 7. Help your child divide their money into three clear jars labeled "Save," "Spend," and "Share."
Create visual savings goal charts for things your child wants to buy. If they want a $20 toy and earn $2 per week, show them it will take 10 weeks to save. During shopping trips, give your child a calculator and have them help add up purchases or find the best deals by comparing prices.
Middle School (Ages 11-13): Building Responsibility
Middle schoolers can handle more sophisticated concepts and greater responsibility with money management.
Key Concepts: Basic banking, comparison shopping, understanding advertising tactics, and introduction to earning money through jobs.
Try These Activities:
Open a savings account at Public Service Credit Union for your child and teach them how to make deposits and check balances. Membership is available to children as soon as they are born to eligible members, and we offer a special certificate only available to minors at 4.00% APY that can help them see the importance of savings and how money grows over time. Give your middle schooler a budget for back-to-school clothes and have them research prices online and in stores.
Encourage simple business ventures like pet sitting or selling crafts. Taking personal responsibility for things helps lessons become part of who they are. Help them track income and expenses from their small business.
Explain how credit cards work and why paying the full balance each month is crucial. This is also a great age to introduce mobile banking tools for hands-on experience with digital financial management.
“Regardless of your child’s age, certain strategies make financial education more effective. Money habits in children are pretty much formed between the ages of 6 and 12. Little eyes are watching you. Model the financial behavior you want to see.”
High School (Ages 14-18): Preparing for Independence
High schoolers should be developing real-world financial skills that will serve them as young adults.
Key Concepts: Advanced budgeting, understanding paychecks and taxes, college financing options, basic investing, and building good credit.
Try These Activities:
Research shows that young people who have jobs are more likely to be better savers in the long run. Help your teen find appropriate part-time work and use their first paycheck as a teaching moment about taxes and deductions.
Have the college funding conversation early. Discuss alternatives to student loans like community college, in-state universities, and scholarship opportunities. Set up a Surge checking account at Public Service Credit Union for your teen – available to members at age 16, this account offers 10% APY on the first $1,000 and comes with a debit card, making it a great tool for preparing for independence. Teach them to balance it monthly while avoiding overdraft fees.
Help your teen create their first real budget using their part-time income. Include categories for savings, spending money, and college savings. Once they have earned income, consider introducing them to retirement savings concepts with a Roth IRA.
Making Financial Education Stick
Regardless of your child's age, certain strategies make financial education more effective. Money habits in children are pretty much formed between the ages of 6 and 12. Little eyes are watching you. Model the financial behavior you want to see.
Use actual cash and coins rather than play money whenever possible. Eighty seven percent of teens report their parents are their main source of financial education, so don't wait for formal lessons – incorporate money discussions into daily life.
Connect lessons to your child's interests and goals, and celebrate financial wins when your child reaches a savings goal or makes smart spending decisions.
The Lasting Impact
According to the U.S. Department of the Treasury, individuals who receive personal finance education have higher rates of savings, make bigger contributions to their retirement accounts, and have a higher net worth.
As you prepare for the new school year, consider adding financial education to your family's curriculum. Whether your child is learning to count coins or preparing for their first job, age-appropriate money lessons provide invaluable life skills.
Start where your child is, be patient with the process, and remember that small, consistent lessons create lasting financial wisdom. The money conversations you have today will help your children build the financial confidence they'll need for a lifetime of smart decisions.
Remember, you don't have to navigate this financial education journey alone. Public Service Credit Union offers free financial counseling to help both parents and teenagers develop the skills needed for financial success. Whether you need guidance on teaching age-appropriate money lessons or your teen wants to learn advanced budgeting techniques, our certified counselors are here to support your family's goals. After all, "Your Financial Success is Our Mission."
Ready to help your child start their financial journey? Contact Public Service Credit Union at (715) 842-9865 or email info@publicservicecu.org to learn about youth savings options and financial counseling services that support your family's financial goals.