Teaching kids financial literacy is key to setting them up for future financial success. Here are simple and effective ways to help your children develop a healthy relationship with money.

It's important to teach kids financial literacy as an essential skill for their future financial well-being. Even if you don’t consider yourself financially savvy, there are some ways you can impart some great financial lessons on your children and help pave the way for a positive relationship with money.

Start early

Introduce basic financial concepts as soon as children are old enough to understand them. Even simple activities like counting money or saving coins in a piggy bank can lay the foundation.

Use everyday examples

Relate financial concepts to everyday situations. For instance, when grocery shopping, explain the concept of budgeting, comparison shopping or the difference between needs and wants.

Allowance and budgeting

Give children an allowance and encourage them to budget it wisely to save for something they really want, rather than spending it all the day they receive it on candy (didn’t we all do that at least once as kids?). Help them understand the importance of allocating money for different purposes such as saving, spending and giving.

Saving and goal setting

Teach children the habit of saving by setting savings goals, whether it's for a toy, a game or a bigger purchase. Help them understand the concept of short-term and long-term goals.

Banking basics

Take children to the bank to open a savings account in their name. Explain how banks work, including deposits, withdrawals, interest and the importance of keeping track of transactions.

Games and activities

There are many board games, apps and online resources designed to teach financial literacy in a fun and engaging way. Even the classic game Monopoly can help reinforce concepts like budgeting, investing and risk management.

Lead by example

Be a positive financial role model by demonstrating responsible money management habits, such as budgeting and saving. Let them see you pay bills and make financial decisions as a family.

By incorporating these strategies into everyday life, parents can help children develop the skills and habits they need to make sound financial decisions both now and in the future.

Originally published in March 2024.