June 13, 2024

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Financial Literacy for Kids – Teaching Money Skills From an Early Age

3 min read

Teaching kids about money may be challenging, but financial literacy is essential in equipping children for life in today’s real world and helping to avoid problems such as student loan debt later on in their lives.

By age seven, children will have a much stronger grasp on numbers and can independently manage money. Take this opportunity to educate them on needs versus wants, budgeting versus saving, value versus worth, etc.


At this age, children can understand that money must be earned. Now is a great opportunity to begin providing children with small allowances and instructing them in spending decisions as well as saving with traditional piggy banks or online tools such as Bankaroo.

Kids can learn to analyze past purchases and create budgets to prioritize future needs, creating a mindset of planning for the future that will follow them into adulthood.


At this age, children can begin to understand the basics of money such as earning it and its costs; and also develop the ability to prioritize and plan ahead.

Teach children how to get the most value out of their money by exploring deals and bargaining. Discuss budgets in detail and encourage them to set personal goals that will lead to reaching their dreams.

Play classic board games such as Money Bags with your children to help them learn the importance of delayed gratification and save up for something they truly want.

First Grade

At this age, children can start to recognize that money can be used to purchase things. Understanding expenses versus income and prioritizing needs over wants are also critical concepts for growth.

At this stage, it’s also an ideal opportunity to introduce them to saving by having them set aside money in a change jar or craft their own savings bank (check out these printables). Furthermore, encourage them to earn money through chores and errands they perform for pay.

Second Grade

Second graders are ready to learn budgeting, paying off debt and saving money skills. You can teach these techniques using classroom activities with teacher guides and student materials included.

Visual representations are particularly effective at this age when children still struggle to grasp complex money concepts. Use a fable or money science experiment to show children how savings grow over time, or list all current bills and expenses with them to help differentiate expenses and income.

Third Grade

At this age, children begin to grasp a better grasp of the complex financial landscape. Visual representations like dollar bills and coins can be especially effective strategies in teaching children about finances.

Young children learn to distinguish between needs and wants, which is crucial in making informed spending decisions. Children also can begin prioritizing experiences over items by saving up for family trips instead of buying new toys.

Create a savings account and teach them about its value.

Fourth Grade

Fourth grade is when children start understanding that things cost money. Now is an excellent opportunity for parents and teachers alike to help children set budgets for shopping trips and reinforce why it’s important not to go beyond these predetermined amounts.

Children lacking financial literacy tend to make poor choices regarding spending, future planning and debt management that may lead to unmanageable debt loads, poor credit or even bankruptcy.

Assist your children in developing saving skills through filling in this money skills word wall and then teach them hands-on how to save.

Fifth Grade

Budgeting can open their eyes to the benefits of planning ahead for their spending habits and saving for tomorrow. Teach fifth grade students how to categorize past spending and create a budget plan using these task cards.

At an early age, it’s vital for kids to grasp the concept of earning money through household chores or an allowance, saving it, and opening an account with an investment firm. Furthermore, this time can also teach them about competition between businesses setting prices.

Sixth Grade

Children and teenagers need a basic knowledge of money in order to make responsible spending and saving decisions, but unfortunately many students do not learn these fundamental skills in school.

By emphasizing money habits early and often, gaps in financial literacy can be bridged quickly. Discuss your own purchase decisions such as bargain shopping vs name brand purchases; use change jars to demonstrate savings behaviors; ensure your child’s bank account can be viewed online to facilitate independence as they mature.

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