5 essential money skills to teach your kids (at every age)

As parents, we want to teach our kids so many things: kindness, responsibility, resilience, independence, and critical thinking .... Smart money habits are also on the list, but when and where to start can be daunting. Is a 3-year-old too young to learn about money? What should you teach a teenager before they head to college? The good news is that introducing kids to financial literacy concepts is never too early—or too late! This article outlines the most essential money skills you can teach kids from preschool through their teen years. 

Core money skills for kids of every age

Let’s start with some foundational money skills that all kids can learn about in childhood. These are organized by skill instead of age, so you can decide when your kids are ready for each one.

1. Earning money

The idea that money is not unlimited can be difficult for kids to understand. So this is a good money skill to start teaching your kids while they’re young. Teaching them that money can be earned as part of an allowance through work like chores, a first job, and even entrepreneurial ideas can demonstrate the relationship between work and money for even young children. This list of everyday household chores is a great place to start.

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2. Saving money

Next is the power of setting financial savings goals. Once kids have experienced that earning money is one result of hard work, it’s time to introduce them to saving. Talk with your kids about needs vs. wants and how to make smarter choices with their money. You can also teach them about compound interest and how it can help them grow their savings over time.

Family apps like Greenlight make it easy to show kids how savings can be a powerful habit when they start earning money. As a parent, you can also allocate portions of your kids’ allowance payments to Savings to instill smart money management skills.  

3. Spending wisely

It’s never too early to introduce your kids to budgeting; it becomes even more essential for teens who may begin earning money. Start by teaching your kids budgeting basics, like how to plan spending, even for small purchases. Part of this conversation may also include delaying gratification and understanding the difference between impulse buying and thoughtful spending.

4. Giving back

Generosity is a key money skill for kids because it teaches financial responsibility, empathy, and long-term thinking. You can start by talking with your kids about donating, volunteering, and supporting causes they care about in other ways. If you use Greenlight, kids can put their own money aside to donate or make a purchase for a nonprofit of their choice right in the app. 

5. Investing

When you teach your kids about investing, they can see how money has the potential to grow over time. Start by explaining the basics: stocks, mutual funds, and how small investments can add up over the years. You may even want to show them real-world examples, like how their favorite company’s stock changes in value or how diversification can reduce the risk of losing money long-term.

Money skills for kids by age

Now it’s time for a few actionable ways you can teach your kids helpful money skills at specific ages.

Preschoolers (ages 3-5)

• Identify coins and bills. Create a fun “Name the Money” game to teach your kids the names, values, and differences between coins and paper money.

• Play store. Set up a pretend mini-store at home where your kids can “buy” and “sell” items using play money.

• Save in a piggy bank. One great habit for kids this age to develop is putting money in a bank (or even a virtual piggy bank!) and watching their savings grow.

• Understand wants vs. needs. There are so many everyday situations (like grocery shopping, back-to-school shopping, and planning for a family outing) that you can use to explain the difference between wanting something and needing something.

• Count money. Practice simple addition with coins to reinforce math skills—and maybe even let them "earn" some for extra motivation!

School-age kids (ages 6-10)

• Earn allowance. Are you ready to empower your kids with a few household chores? Give them a weekly allowance directly tied to chores or other responsibilities.

• Open a savings account. Open a savings account for your child. Show them how to deposit money and track savings over time.

• Set simple savings goals. One way to teach savings is to have your child save for a toy or special purchase they want and track their progress as they save.

• Make spending choices. Let your kids take the reins on some of their own money; allow them to decide how to spend it and see firsthand how their choices play out.

• Introduce giving. Encourage your kids to set aside a small portion of their money for a cause they care about and help them see the impact of their donation in action.

Tweens (ages 11-13)

• Manage a budget. A budget is an excellent tool for kids to learn! This age is a great time to help your kids plan how to spend, save, or donate their monthly allowance in their budget.

• Learn about digital money. Online banking is the norm, so it’s wise to introduce kids to digital wallets and cash apps – and how to use them safely.

• Practice delayed gratification. If your child spends their money as soon as they earn it, start a fun challenge to save for more meaningful or necessary purchases instead of buying things impulsively.

• Understand how banks work. Lay the foundational knowledge and teach your kids about savings accounts, how interest works, and how banks keep money safe.

• Start a business. Does your child have a great idea brewing? Embrace their entrepreneurial spirit and encourage your kids’ business ideas like pet sitting, selling crafts, or yard work.

Teens (ages 14-18)

• Understand paychecks. Help your teens decode their pay stubs, set up direct deposits, and grasp the not-so-fun reality of taxes.

• Use credit cards responsibly. Break down credit scores and interest rates while teaching them how to borrow responsibly because "free money" isn’t really free.

• Explore investing. Walk your teen through the basics of stocks, bonds, and compound interest so they can start building wealth early.

• Understand bills and subscriptions. Teens need to know how recurring payments add up and why budgeting is key to covering their monthly bills without surprise (and expensive!) “oops” moments.

• Save for big expenses. Is your teen thinking about buying a car? Or taking a trip? What about college expenses? Talk with your teen about the importance of saving for major purchases.

Working through any of these ideas with your kids is a step toward teaching them money management basics. And it’s a win! Whether it’s playing store or making their first budget, these early lessons shape smart money habits for the future.

Teach money skills for life. From their first paycheck to saving for college, Greenlight helps families teach critical financial lessons. Try Greenlight, one month, risk-free.†

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