Tips for Moms Teaching Children about Finances

We teach our children from a young age about all important aspects of life – the dangers of drugs, the importance of sports and education, development of their interests and hobbies because it’s important that they know what they want to do when they grow up.  However, when it comes to finances and budgeting, this topic is never commonplace.  As adults we don’t think it’s necessary for them to know about finances – it’s just not relevant.  However, it is important for children from a young age to have a financial education because all adults are affected by their ability to manage their finances and learning from a young age only improves their ability.  Children are able to learn quicker when learning is fun and when finances are made a part of everyday life.  Here are some tips for moms teaching children about finances whether toddlers, nursery schoolers or teenagers.


Small children often don’t understand why they are not allowed to have all the toys they want. When the simple answer is parents cannot afford to buy them all the toys they want.  However, it’s possible to help children understand that things cost money and we have to work to earn it.

Some ideas for your toddlers:

Learning to count:  Use real money to help your toddler learn how to count.

Paying at the shops:  By allowing your child to actually pay at the shops helps demonstrate that money is used to buy what we need.

Nursery Schoolers

Some ideas for your nursery schoolers:

Lemonade / cupcake stands:  Children always love to setup the stand and make the merchandise. Lemonade or cupcake stands can be setup at nursery schools or funfairs.  This example allows children to learn that they have to work to earn money and the exchange of merchandise for money.

Garage sales:  Not only an opportunity to get rid of unwanted toys and clutter, children always enjoy garage sales.  Garage sales are often held at churches and orphanages.  Children can price the items they want to sell so that they understand the value of them, and work the cash register on sale transactions.

Monopoly:  The popular board game is not only fun but demonstrates important financial aspects such as managing money and saving.

Pocket Money:  In order to earn the pocket money, give your child a household chore such as mowing the lawn.  Again this is a demonstration that money has to be earned.  Children are more likely to be careful how the money is spent if they’ve had to work for it, rather than being given it.

Save, Invest, Spend:  Label three jars as Save, Invest and Spend.  Any money your child receives whether pocket money or from gifts should be divided between the three jars.  The spend jar will be money for entertainment, Save will be for them to save up for something they have wanted for a while and Invest will be for a longer term goal.  An idea would be to add 10% to the money in the Invest jar to demonstrate that interest earned on investments.


Part-time jobs:  By holding a part-time job such as waiting tables or working in a shop, teenagers learn the value of money – the time and effort it’s taken to earn the money.  Encourage them to save towards something they really want and plan how much work is needed to achieve it.

Allow financial mistakes:  It’s also important for teenagers to learn the reality of making financial mistakes on their own.  A practical example is taking them to the funfair with a set allowance, once the money is finished (whether games were well-chosen or not), the money is finished.

Go to the bank:  Teenagers should have their own bank account in which to deposit earnings from part-time jobs.  Go to the bank with them to help them open up an account.

Explain expenses:  University loans, home loans, car loans and bills are all an everyday reality and they need to understand that one day they will also hold this responsibility.

The Stock market Game:  Choose 10 companies your children are familiar with – provide an investment allowance (for example £100) and get them choose one company they want to invest in.  Review the stock prices of the 10 companies with them each week.  This game demonstrates investing to them.

These tips can help moms when it comes to teaching children about finances and are likely to help children understand the value of money.


Source consulted:

The facts and opinions presented in this blog article do not necessarily reflect those of the CybiWealth team or FIM Capital Limited.  FIM Capital is licensed by the Isle of Man Financial Services Authority and authorised and regulated by the Financial Conduct Authority.