Teaching Children About Money: A Guide for Every Age

Teaching children about money from an early age helps them develop valuable financial habits that will last a lifetime. The lessons you teach should become more detailed and practical as they get older. The Financial Resources page on the Crews Bank & Trust website has several linked teaching sites for children (Resources) based on age to help get the conversation started.

Here are tips for teaching financial literacy at different stages of childhood:

Very Young Children (Ages 3-6)

At this age, children are naturally curious and can start grasping basic concepts about money through play and observation. Keep it simple and engaging.

Introduce Coins and Bills: Teach school-aged children to identify different coins and bills, explaining their value using simple language. Have the child sort the coins by type and explain each coin’s value. Hands-on interaction with “grown-up” money will help keep their attention. Quiz them by asking them what each one is called. Play a game where you show them five pennies and then explain that five pennies have the same value as one nickel.

Play Pretend Store: Set up a small store at home where they can "buy" and "sell" toys or snacks using money. With very young children, don’t get caught up in actual amounts but teach the child that he must give up some money (pay for) to take home (buy) the treat or toy. As they get older and begin to grasp the concept of value, you can begin with simple amounts, where one toy may cost $2. Show them the amount using their money and how much money they have left.

Use a Clear Jar for Savings: Help them see their savings grow. When they add coins, explain how saving money is like building up a treasure. Talk about what the treasure might be used for and how much of that money it might take.

Talk About Choices: Explain that money is used to buy things and that we sometimes must choose between different items because we can't buy everything we want. Introduce “Needs vs. Wants” in a simple concept – we need food to live but want toys.

Read to Them: The Consumer Financial Protection Bureau’s (CFPB) program Money as You Grow Bookshelf offers free downloadable reader’s guides for a long list of children’s books, most that you may already own or if not, should be available at your local library (And as a bonus, it presents a built-in money saving lesson: borrowing the book for free vs. buying!) The guides help you explain the key ideas in each book and gives you questions that you and your child can talk about. The CFPB also offers free pdf book versions of The Money Monsters along with a reader’s guide.

Elementary to Early Middle School (Ages 7-12)

As children become more independent, they begin to grasp financial concepts. This is a great time to introduce real-life money management skills.

Give an Allowance: Consider giving a small allowance for completing chores or other responsibilities. This teaches children how doing a job enables them to earn money and prevents parents from using the old “Money doesn’t grow on trees” lament.

Encourage them to divide their allowance into three segments - spending, saving, and giving. One simple method is called The Three Jar Method where the child divides earnings or gift money into three jars that they label for the three segments, for example “Spending” or “Fun”; “Giving” or “Charity”; and “Savings” or “Long-Term.”  (The American Bankers Association offers free colorable jar wraps to help make this a fun project.) This introduces the opportunity to discuss why giving and savings are as important as fun.

Set Savings Goals: Help them save for something special, like a toy or a game. This will teach them the importance of patience and planning as well as being consistent in saving their money. And if something better comes along, teaches them how to decide which is more important.

Introduce Budgeting: Show them how to budget by helping them plan how they’ll spend their money each week or month. The old-fashioned way of using envelopes to divvy up earnings by week is simple but effective. There are many versions of this method, from fancy binders with zipper pockets, the Three Jar Method discussed above, to auto-transfers from a main bank account into savings accounts designated for specific purposes, such as college or a new bike.

Lead by Example: Involve them in simple financial decisions, like comparing prices at the grocery store or planning a family outing on a budget. When a child understands that the money coming into a household must be budgeted into many areas – rent/mortgage, food, clothing, gas, utility bills and savings – they begin to think about money differently.

Make it a habit to bring your children to the bank with you so they can learn how a bank works. At Crews Bank & Trust, you can introduce your child to your personal banker to begin building a relationship that will instill trust and make going to the bank feel like going to visit a friend.  

High School Age (Ages 13-18)

Teenagers are preparing for adulthood, making it essential to teach them practical money management skills. Before they get their first job, first car or head off to college, it’s a good idea to equip them with the tools they need to make informed financial decisions.

Open a Bank Account: If they don’t already have one, they’ll need to open a savings or checking account. At Crews Bank & Trust, they can open their account online, in less than 5 minutes.

If they have questions, they can visit one of Crews Bank's 19 locations and talk to one of our personal bankers. Encourage them to explore their bank’s website to learn more about what their bank offers. Explain how to use online banking, monitor their account activity, and avoid overdraft fees.

Discuss Credit and Debt: Explain how credit cards work, the importance of paying bills on time to avoid late fees, how interest accumulates and the importance of a healthy credit score. Teach them about the risks of incurring debt vs. only charging what you can pay off each month.

Create a Budget: If they have a part-time job or allowance, help them create a budget that includes needs, wants, and savings, using the 50-30-20 Rule. Crews Bank & Trust’s Online Banking and Mobile App have Budgeting Tools* to help them learn about their spending and how to create their own budget.

*To access Budgeting Tools in Online Banking from a computer, click on the account you want to create the budget in and on the right-hand side you’ll see a menu where Budgeting Tools is an option. From the mobile app, click on the three horizontal lines in the top left corner.

Introduce Investing Concepts: Explain the basics of investing, such as stocks, bonds, and compound interest. Jim Cramer, host of CNBC’s “Mad Money” discusses how “the magic of compounding works best the younger you are, because that means you have more time for your money to grow.” It can be a fun, educational challenge to purchase (or even pretend to purchase and monitor) a small amount of a favorite brand's stock to learn how the market fluctuates and how staying in for the long haul reaps rewards.

Save Small but Regularly: Does your teen dream of owning a car? Use a savings calculator to determine how much money and for how long he’ll need to save to purchase it without borrowing. Starting early with a regular amount will allow him to still have a little money for fun and still be working towards a big goal.

Talk About College Costs: If college is in their future, discuss how the tuition will be paid. Start discussing this early in their high school years, to enable them to join organizations, get a part-time job, participate in sports or do community service, as all these extra-curricular activities will make their application stronger and open opportunities for scholarships.

Talk to them about student loans and enlist them to help fill out the application, so they understand how time consuming it is, how much information and follow up is needed and how much money it’s going to cost the family. They can eliminate some costs by applying for scholarships, using their savings and explore other financial aid options. By being involved, it’s a big step toward acting and thinking more like an adult than a teen.

A Crews Bank & Trust personal banker can work with you and your child to begin their journey into saving and answer any questions you may have. Stop in to see us at any of our locations, during business hours you can call us or reach out online anytime. We're here to help!

By tailoring financial lessons to your child's age, you can lay the groundwork for lifelong financial responsibility. Each conversation builds confidence and helps them make informed choices about their money. Start today, and watch your children grow into financially savvy adults.