A Parents’ Guide for Starting Kids Financial Literacy

09.16.2025 | Category: Build Your Financial Future

Summary: There are several age-appropriate activities and resources that can help you build financial discipline in your kids. In this article, you’ll learn several strategies to help motivate them to learn money management skills that will serve them throughout their lives.

Look back. Do you remember when you first learned about money management?

The learnings that an individual experiences during the elementary stages of life can help them thrive in the long run. Therefore, it is important to teach young ones about crucial skills such as financial discipline in the early stages of life.

If you’re wondering how and when to begin with financial literacy activities for kids, the right time may be to start as soon as pre-school age. You can start with simple concepts and grow more sophisticated as your children mature. From understanding the difference between wants and needs to learning about saving, spending, and investing, there are age-appropriate ways to introduce these concepts that make learning about money both fun and meaningful.

Why financial literacy for kids matters more than ever

From skills in paying off debt faster to exploring investment options, there are several things for your young ones to learn. Research shows that children who receive financial education early in life are more likely to make sound financial decisions as adults.¹

Financial literacy for kids helps build crucial skills, including:

Critical thinking about money decisions
Understanding the value of hard work and delayed gratification
Developing smart budgeting and saving habits
Learning to distinguish between needs and wants
Building confidence in making financial choices

Studies indicate that kids who learn about money management early are less likely to accumulate debt as adults and more likely to build wealth over time². They also develop better problem-solving skills and learn to make decisions about their short-term and long-term financial goals.

Understanding financial literacy for different age groups

Teaching financial literacy to preschoolers (ages 3–5)

At this age, children just begin to understand numbers and basic concepts. Your financial literacy activities for kids should focus on simple, concrete ideas:

Core concepts to introduce:

Money is used to buy things.
Different coins and bills have different values.
You need to work to earn money.
Sometimes you have to wait to buy something you want.

Age-appropriate activities:

Piggy bank savings: Start with a clear jar so they can see their money grow.
Store play: Use toy money to “buy” items during pretend play.
Coin sorting: Help them identify and sort different coins.
Needs vs. wants games: During shopping trips, ask them to identify what the family needs versus what they might want.

Elementary school financial education (ages 6-10)

Children this age can grasp more complex concepts and are ready for hands-on money management experiences:

Key concepts:

How to count money and make change
The importance of saving for goals
Basic budgeting with income and expenses
Understanding that money choices have consequences

Practical activities:

Allowance management: Give them a weekly allowance and help them divide it into spending, saving, and giving categories.
Goal-setting projects: Help them save for a specific toy or experience.
Family budget discussions: Include them in age-appropriate conversations about household expenses.
Banking basics: Open a savings account and teach them about deposits and withdrawals.

Middle school money management skills (ages 11-13)

Preteens can handle more sophisticated financial concepts and benefit from real-world applications:

Advanced concepts:

Understanding compound interest and how it works
Introduction to investing basics
Comparison shopping and smart consumer choices
The importance of credit and building good financial habits

Engaging activities:

Entrepreneur projects: Help them start a small business like a babysitting or pet-sitting service.
Investment tracking: Use apps or websites to track a pretend stock portfolio.
Comparison shopping: Teach them to research prices before making purchases.
Family financial meetings: Include them in discussions about financial planning and goal-setting.

High school financial literacy course preparation (ages 14-18)

Teenagers need to understand complex financial concepts as they prepare for adulthood:

Essential skills:

Banking and checking account management
Understanding credit scores and credit cards
Student loan and college financing basics
Job applications and understanding paychecks
Introduction to taxes and insurance

Real-world preparation:

Part-time job guidance: Help them understand paycheck deductions and savings goals.
College financial planning: Discuss tuition costs, scholarships, and student loans.
Practice with plastic: Consider a secured credit card or debit card with spending limits.
Insurance education: Explain the importance of life insurance and other protection products.

Year-round financial learning opportunities

Integrate financial literacy activities for kids throughout the year with seasonal projects like lemonade stands in summer, back-to-school budgeting in fall, holiday gift planning in winter, and spring garage sales. These real-world experiences make money concepts concrete and memorable.

The Consumer Financial Protection Bureau’s Money as You Grow³ program provides various resources and activities for parents, caregivers and educators to encourage financial literacy for kids.

Creating effective financial conversations at home

Apart from involving the kids in various money-management activities, including them in finance-related conversations at home can also help shape a financially smart kid.

Making money talks natural

Many adults feel uncomfortable discussing money with their children or grandchildren, but these conversations don’t have to be formal or intimidating. The key is making financial literacy for kids a natural part of daily life:

Daily opportunities:

Grocery store math: Let kids help calculate costs and compare prices.
Bill-paying time: Explain what different bills are for and why we pay them.
ATM visits: Explain where money comes from and how banks work.
Online shopping: Show them how to compare prices and read reviews.

Age-appropriate conversations

For younger children: Focus on “We work to earn money” and “We save for things we want.”
For older children: Discuss “Why we budget for different expenses” and “How interest helps savings grow.”
For teenagers: Explore real-world scenarios like college costs and understanding car ownership expenses, including insurance.

Best financial literacy books for kids by age

Apart from activities, parents can refer to age-appropriate money-management books to teach the young ones about financial discipline.

Preschool financial literacy books

Bunny Money by Rosemary Wells
The Penny Pot by Stuart J. Murphy
Money Madness by David A. Adler

Elementary school money books

The Kid’s Guide to Money Cent$ by Steve Otfinoski
Smart Money Smart Kids by Dave Ramsey and Rachel Cruze
How to Turn $100 into $1,000,000 by James McKenna

Middle and high school financial literature

The Opposite of Spoiled by Ron Lieber
The Total Money Makeover for Teens by Dave Ramsey
Rich Dad Poor Dad for Teens by Robert Kiyosaki

Digital tools for financial education

Use technology to make learning engaging:

Elementary-friendly apps: Acorns Early for savings goals and spending tracking and Savings Spree for spending decisions for basic money concepts.
Teen-focused tools: Greenlight debit cards with parental controls and iAllowance for chore tracking.
Educational resources: Practical Money Skills by Visa, BizKid$ videos, and Jump$tart Coalition materials provide comprehensive learning materials.

Building Financial Confidence in Kids Starts at Home

Many parents hesitate to address financial education because they feel unprepared for the task. However, building a strong program doesn’t require advanced expertise. Several free resources offer age-appropriate curricula that help simplify complex concepts into digestible lessons for children at different developmental stages.

Such programs often include multilingual options to accommodate diverse families. Public libraries maintain extensive collections of financial literacy materials specifically designed for young learners, featuring interactive elements that engage children while teaching fundamental money management skills. Digital tools and educational games help provide additional reinforcement through hands-on learning experiences.

Parents can combine these structured resources with everyday teachable moments, such as discussions about household budgeting or vacation planning. This approach provides a comprehensive financial education experience that assists children in making informed, real-world money decisions.

Common challenges and how to overcome them

Even with the best intentions and resources, parents often encounter obstacles when teaching financial literacy for kids. Understanding common hurdles and having practical solutions can help you navigate these situations while still building that crucial foundation for your child’s financial future. Here are a few challenges you may run into:

“My child isn’t interested in money topics”

Solutions:

Connect money lessons to things they already care about (toys, games, treats).
Use technology and apps to make learning interactive.
Start with very short lessons and gradually increase engagement.
Let them make real money decisions with small amounts.

“We don’t have much money to teach with”

Remember:

You don’t need money to teach financial literacy. You just need to understand how money works.
Use pretend money or apps for many activities.
Focus on free financial literacy courses for kids like library books and educational websites.
Emphasize that good money habits matter regardless of income level.

“My partner and I disagree about money”

Strategies:

Focus on universal principles like saving and spending wisely.
Agree on basic concepts before teaching children.
Show children that adults can have different approaches while sharing core values.
Consider seeking professional guidance if disagreements are significant.

The role of schools vs. parents in financial education

While many states now require financial literacy courses for kids in high school, parents remain the primary influence on children’s money attitudes and behaviors.⁴

What schools typically cover:

Basic economic concepts
Banking and credit basics
Consumer protection
Career planning and income

What parents uniquely provide:

Real-world application and practice
Family values around money
Immediate feedback and guidance
Ongoing support and modeling

The most effective approach combines formal education with consistent reinforcement at home and setting a strong example for your kids. Even if your child’s school offers comprehensive financial education, your ongoing involvement and modeling of good financial habits remain crucial.

Building your family’s financial foundation

Teaching financial literacy for kids strengthens your entire family’s financial position. As you guide your children through budgeting and saving concepts, you create opportunities for family financial success.

Children who understand money will likely make fewer costly mistakes, while family members working toward shared financial goals can help create mutual accountability.

Most importantly, financial education builds confidence. When children understand money fundamentals, they develop the skills to make good financial decisions throughout their lives and seek professional advice when needed. At Mutual of Omaha, we understand that financial literacy forms the foundation of lifelong financial security. Explore more resources on financial planning in our Planning & Advice section.

Frequently Asked Questions

How do I handle it when my child makes poor spending decisions?

Poor spending decisions are valuable learning opportunities. Stay calm and avoid saying “I told you so.” Instead, help your child reflect on what happened by asking questions like “How do you feel about that purchase now?” and “What might you do differently next time?” Let them experience the natural consequences, such as not having money for something they want later. This teaches them that financial decisions have real impacts.

Should I give my child a debit card or credit card as a teenager?

A debit card is generally the better choice for teenagers since it prevents overspending and teaches them to live within their means. Look for teen-focused debit cards with parental controls that allow you to monitor spending and set limits. Avoid credit cards until your teen demonstrates consistent responsible money management, as credit card debt can quickly become overwhelming for young people still learning financial basics. You may also consider providing a credit card with a very low spending limit so they can practice spending responsibly.

How can I teach kids about investing without risking real money?

Use investment simulation apps and websites that let kids track pretend portfolios with real stock prices. Many online platforms offer “paper trading,” where children can practice buying and selling stocks without involving actual money. You can also create family investment challenges using small amounts of real money ($25-50) to make it more engaging while keeping risks low. Focus on teaching concepts like diversification and long-term thinking rather than trying to pick winners.

Should kids receive allowances, and how much?

Allowances can be an effective tool for teaching money management, but the approach varies by family. Some families tie allowances to chores, while others provide unconditional allowances to teach budgeting. A common guideline is $1–2 per week for each year of the child’s age, but adjust based on your family’s financial situation and values.

Footnotes

Champlain College, Is Your State Making the Grade?, 2023
Truetamplin, True. “Financial Literacy In Schools Is Improving But More Needs To Be Done.” Forbes, August 12, 2024.
Consumer Financial Protection Bureau, Money as You Grow: Help for parents and caregivers
Sari, N. P., & Sari, R. P. (2023). Does parent behavior influence children financial behavior? Journal of International Conference Proceedings.

Disclosures:

Registered Representatives offer securities through Mutual of Omaha Investor Services, Inc., Member FINRA/SIPC. Investment Advisor Representatives offer advisory services through Mutual of Omaha Investor Services, Inc. Mutual of Omaha Advisors is a division of Mutual of Omaha Insurance Company.

All investing involves risk, including the possible loss of principal, and there can be no assurance that any investment strategy will be successful.

Mutual of Omaha and its representatives do not provide tax and/or legal advice, and the information provided herein is general in nature and should not be considered tax and/or legal advice.

Not all Mutual of Omaha agents are registered representatives or financial advisors.

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