How to Talk about Money with Kids at Any Age

How Do I Start Teaching My Kids About Money?

Studies show that kids are already forming money habits as young as age seven. You can start teaching them simple financial lessons from the time they’re toddlers! It can be tough to know where to start, so we’ve compiled suggestions for how to talk money with kids of any age.

Key Takeaways

Don't avoid talking about money with your kids

Even if it’s hard. Your kids are learning money habits from you whether you talk about it or not.

Include Your Kids in Real Money Conversations

Don’t be afraid to talk about finances with and around your kid. Keep these discussions calm, and do your best to answer questions and ask for your child’s opinion.

Start Now!

No, your kids isn’t too young, too old, too anything. There are great lessons for kids as young as 2, and by the time they’re seven kids have already started forming money habits. Start teaching age-appropriate lessons now.

Money Lessons for Young Kids

No, your toddler is not too young to start learning about money! Counting, sorting, and celebrating are great tools to help kick-start your little one’s financial savvy. Check out these five ways to teach your toddler about money.

Start a Savings Jar

Use a clear jar and start helping your little kids collect and “deposit” coins and dollars into the jar. Talk about the names of the coins you put in the jar. Help them sort coins and count how many of each they have. Most importantly, show excitement as the jar fills up. Teaching your kids to take joy in saving money is key!

Talk about Money Around Your Kids

Your kindergartener might not understand credit cards and budgets, but they pick up on your stress and frustration just fine. Don’t avoid talking about money around your kids, but make sure those conversations are calm and not sources of stress for your little ones. Show them that working on financial health is part of life, and doesn’t have to be scary. Work on getting comfortable talking about everything from credit card debt to retirement savings to salary negotiations around your kids. And when they do start to ask questions, take them seriously and answer as well as you can.

Let them Buy Something

Next time your toddler wants to take home a toy from the grocery store, embrace the chance to teach them about spending! Help them count the money out of their savings jar, and let them pay the cashier themselves. Then talk about how you have to start refilling the jar again.

Don’t Be a Money Tree

Learn to set limits on what you will and won’t buy for your kids. This can teach them to learn the difference between a need and a want – even if the wants sometimes end up in grocery aisle tantrums.

Open a Savings Account

Sierra offers savings accounts for kids as young as newborns. Open their first account early, and bring them into the branch to deposit piggy bank savings every month. Let them sit at the counter and hand the money over. Show them their account in online banking, and celebrate the balance increasing.

Money Lessons for Elementary-Aged Kids

A little older, a little wiser, a little more ready for big money lessons. Kids aged 7 to 11 are a great audience for lessons about how to earn, save, spend, and invest. They’re ready to start planning how to make and use money and can be invited into family money discussions. Here are four ways to teach your elementary school child about money.

Pay for Chores

Look, there are some things your kids should just be doing without an extra incentive – cleaning their room, putting away their toys… But additional tasks that benefit the whole household can come with a lesson on earning money. Build out a list of age-appropriate tasks, and put a dollar amount on those chores. This lets your kids learn about earning money for putting in work, and opens the door for lessons about…

Money Buckets

Start teaching your child about the different ways money can be used. Use different jars to set cash aside for saving, giving, investing, and spending. Try starting with this balance – 30% goes to saving, 30% to investing, 20% to giving, and 20% to spending. When they want to spend money on something or give a gift or donation, make sure you take money from the right jar. Help them set a goal to save for – summer vacation spending, a video game they want, a new bike. Ask about how their savings are going, and celebrate smart choices with them.

Talk about Impulse Purchases

Just like with your younger kids, the dreaded, “Can we get this” question at the store is a great opportunity to talk about money. Is it something you want, or something you need? Do you have the money in your spending account to pay for it? If you buy this, what will that mean for that other thing you wanted? Can you go earn more money, and come back for it when you’ve earned enough?

Start Investing

Yes, your eight-year-old is old enough to start learning about investing. In fact, by eight many kids know more about cryptocurrency than their parents do! You can start by talking about topics like risk and return, stocks and bonds, and dividends. You can even open an investment account with them.

Money Lessons for Teenagers

As your kids grow into their teens, reinforcing good money habits and building their financial vocabulary can help set the tone for their money decisions in the “real world”. Now’s the time to dive into the bigger topics – debt and responsible spending, how to manage financial accounts, and how to budget for expenses. The most important tip at this stage? Just talk about it! Keep talking about your money experiences with and around your teens, ask what they think, share your plans and situation, and be honest about mistakes you’ve made and goals you have for your own finances.

Include them in Family Finances

Have your teen take over grocery planning and shopping for the week. Talk about what the food budget is, help them plan a meal, and let them do the shopping all the way through. Invite them to look at the family’s spending last month, and talk about where you can cut back and expenses that are coming down the line.

Open a Youth Checking Account

Sierra’s youth members can open a checking account at age 12. Transition that “Spending” jar into a spending account, and keep working with your teen on how they set money aside for saving vs. spending, checking balances, and depositing what they earn.

Get Their First Loan

Adding your teen as a co-borrower on a credit card or auto loan can help build their credit score and provide a chance to talk about how debt works. Talk about what it means to use a credit card, how to make regular payments, what interest is, and how it adds up over time. Make them responsible for making the loan payments, and check in often to make sure they remember and to celebrate balances being paid down. Working on smart debt management now will save your teen from making mistakes when they’re on their own.

Talk about Taxes

As your teen starts earning real money, they’ll also start to see real taxes coming out of that paycheck. Talk about what that means and how it impacts things like budgeting.

Save for College

Or trade school, or a year in Africa, or whatever your teen wants to do after high school. Talk about what they might want to do next, explore options and costs of those things, and help them start saving up. Will they need a loan? What financial assistance – if any- can they expect from you? How much will they need to earn in scholarships and grants, and how can they start doing that?

Make a Budget

Work with your teen to plan how to cover expenses with income. Make a practice budget for when they’re on their own – split up an imaginary income between rent, food, transportation, debt payments, savings, and other expenses. Talk about how things line moving (first & last month’s rent), car repairs (new battery, anyone?), and the holidays can throw off a budget

Start an Emergency Fund

Your teen is getting ready to step out into the real world, and the real world is full of unexpected expenses. Help them build a fund that is just for rainy days. That way, you won’t be transferring $300 when their tire blows out next month. They’ll be able to cover that cost themselves.