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Raising Financially Savvy Adults

Aug 01, 2023
tips for teaching kids about money

Hello, fellow parents! We all want our kids to grow up to make smart financial choices and become independent, financial-savvy adults. Yet, according to the T. Rowe Price 2022 14th Annual Parents, Kids, & Money survey, 56% of parents reported they were extremely, very, or somewhat reluctant to discuss financial matters with their child because they were too young to understand, have enough to worry about, or too embarrassed by their own financial situation.  

But don't worry; teaching them about finance can be enjoyable and straightforward! In this blog, we'll share age-appropriate strategies to empower your kids with financial know-how from childhood to adulthood.


Money Made Simple (Ages 3-6)

During these adorable years, kids are curious learners, making it a perfect time to introduce money concepts in a fun way:


  • Play Pretend Store: Set up a “store” at home where your child can “buy” and “sell” toys and snacks using play money. This can help teach them the value of coins and bills, exchanging money for goods, and comparison shopping.
  • Save, Spend, Share: Provide three labeled, clear jars and encourage your child to allocate loose change, allowance, or gifts into each jar. This can teach them the concepts of budgeting, saving up for something special, and the joy of giving.  When the time is right, sort the coins and bills and count the money in each jar.
  • Storytime: Age-appropriate books about money are perfect for teaching your child basic financial lessons.  They can help explain the difference between needs versus wants in a relatable manner while also increasing your child’s math and reading skills.  Check out book recommendations.


Money Adventures Ahead (Ages 7-12)

As kids grow older, parents can build on their foundation with real-world money skills.  Here are some ways to move from theory to practice:


  • Allowance and Budgeting: Consider giving a weekly or monthly allowance tied to age-appropriate chores and help them create a simple budget for spending, saving, and sharing. This can help them learn the value of hard work and responsibility while also managing their money earned effectively.
  • Setting Savings Goals: Encourage your child to set financial goals by saving for something they want. Whether it's saving for a new video game or a shopping trip, working toward a goal teaches patience and delayed gratification when they achieve their goal.  It’s also a good time to explain interest, show them how money can grow over time, and feel free to match a percentage of their savings to motivate them further.
  • Shopping Wisely: Take your child along to the grocery store and involve them in comparing prices, finding deals, and using coupons/apps to save money. This will help them make thoughtful purchases and understand the value of money when purchasing necessities.


Financial Superheroes in Training (Ages 13-17)

As your kids approach adulthood, it's time to teach them more advanced financial concepts. Here's how to guide them:

  • Bank Account and Debit Card: Open a joint checking and savings account with your teen and teach them how to check balances, manage online banking, and use a debit card responsibly.  This is also a great time to talk about credit cards, the dangers of debt, and how interest can affect their financial future.
  • Earning Income: Encourage part-time jobs or entrepreneurial ventures to begin earning their own money.  This helps them feel some financial independence, understand the value of hard work, and learn to manage their income. 
  • Savings & Investing: Discuss long-term savings for significant expenses like a car and/or their college education, as well as an emergency fund.  This is also a great time to introduce the concept of investing and the power of compound interest.

Financial Freedom 101 (Age 18+)

As young adults, they’re almost ready to take flight.  As they embark on their own financial journey, here's what they need to know:


  • Financial Independence: Help them create a comprehensive budget that includes essential living expenses, savings, and discretionary spending. Teach them about emergency funds, retirement planning, and investing for long-term wealth accumulation.
  • Credit Score, Cards, and Debt: Educate them about credit scores and how they impact future financial opportunities; emphasize the need to prioritize needs over wants and the consequences of not paying off credit card bills in full each month; and explain the implications of student loans and the importance of managing debt effectively.
  • Life Skills: Remind them of other essential life skills that can save them money, such as cooking at home, basic car maintenance, how to file income taxes, etc.


Teaching kids about finance is a gradual process, and our parent-friendly tips will make it enjoyable for both you and your kids. Remember, it's never too early or too late to start teaching them about money. The key is to keep it engaging, practical and adapt the lessons as they grow. Let's embark on this exciting money journey with our kids and watch them become financially savvy adults!