Raising Money-Smart Kids: Practical Ways to Teach Financial Literacy at Any Age | Allworth Financial

Allworth Head of Wealth Planning, Victoria Bogner offers some ways to help your children become financially savvy.

As parents, we want to give our kids the best shot at a successful future, and that goes far beyond academics or extracurriculars. One of the most valuable life skills we can teach them is financial literacy. Understanding how money works (how to earn it, save it, spend it wisely, and grow it) is essential for a confident and independent adulthood.

Fortunately, financial literacy isn’t a one-time lesson. It’s something we can build little by little, starting at a young age and evolving as our kids grow. Here are some age-appropriate ways to help your children become financially savvy.

Start Young: Ages 3–7

Make Money Tangible and Fun

In early childhood, kids are just beginning to understand the concept of value and exchange. This is the perfect time to lay the groundwork for good habits.

• Use a Clear Jar for Saving: Piggy banks are cute, but a clear jar helps kids see their money grow. When they earn or receive money, show them how to add it to the jar. Celebrate progress!
• Play Pretend Store: Set up a small shop at home using play money. Let your child “buy” items and practice making change to understand value and budgeting.
• Set a Simple Goal: If they want a small toy, help them save up for it. Talk about how long it might take and how close they are.

This is also a great time to introduce the idea of giving. Let them set aside a small amount to donate to a cause they care about.

Teach Through Allowance: Ages 8–12

Hands-On Budgeting and Responsibility

This is the age where money can be used as a teaching tool for responsibility. If you choose to give your child an allowance, use it as an opportunity for learning rather than just a weekly handout.

• Split It Into Categories: Encourage the “save, spend, give” model. For example, if your child receives $10 per week, they might save $4, spend $5, and donate $1.
• Create a Simple Budget: Show them how to track their allowance or chore money using a notebook or kid-friendly app. Help them plan for short- and long-term goals (like a game or a new bike).
• Teach Delayed Gratification: If they want something that exceeds their budget, help them set a plan to save over several weeks. Learning to wait and plan is a powerful financial muscle.

This age is also ideal for introducing wants vs. needs—a critical distinction in personal finance.

Encourage Earning: Ages 13–15

Develop Work Ethic and Decision-Making

As kids enter their teens, encourage opportunities to earn money outside of allowances. This could be through babysitting, pet sitting, yard work, or selling crafts or baked goods.

• Talk About Hourly Value: If your child earns $10/hour babysitting, help them understand the value of their time. Suddenly, a $40 pair of sneakers might seem more expensive when it “costs” four hours of work.
• Open a Youth Bank Account: Many banks offer teen checking accounts with parental oversight. Help them monitor balances, track spending, and even learn how to avoid overdraft fees.
• Review Real-Life Expenses: Introduce them to bills you pay, like cell phones, groceries, streaming services, so they begin to understand the real cost of living.

This is also a great time to talk about social media and marketing influence: how ads, influencers, and trends can subtly (and powerfully) influence our spending habits.

Prep for Independence: Ages 16–18

Focus on Big-Picture Financial Skills

As your teen approaches adulthood, begin preparing them for financial independence.

• Create a Simple Budget Together: Include expected income (from a part-time job or allowance) and typical expenses (gas, school supplies, entertainment). Show them how to balance it and make adjustments.
• Teach About Credit: Explain credit scores, interest rates, and the dangers of debt. If you feel they’re ready, consider giving them a credit card with a low limit and set clear expectations for use and repayment.
• Talk About College Costs: Be transparent about tuition, scholarships, student loans, and what you’re able or willing to contribute. Help them research options and make smart decisions about debt.
• Introduce Compound Interest: Even small investments at this age can have a big payoff later. Help them understand the power of starting early with a Roth IRA or custodial investment account (if appropriate).

By this stage, kids are not just managing spending; they’re making choices that will impact their future financial health. Treat them like young adults and include them in financial conversations.

Lead by Example

Your children are always watching, even when you think they aren’t. One of the most effective ways to teach financial literacy is to model it yourself.

• Talk openly about saving for goals, making trade-offs, or using a budget.
• Celebrate financial wins as a family—like paying off debt, saving for vacation, or meeting a charitable giving goal.
• Be honest about mistakes, too. It shows them that learning is a lifelong process.

Financial literacy is one of the greatest gifts you can give your children. You don’t need to be a finance expert; you just need to start the conversation and create an environment where money is talked about in a healthy, open way. By giving your kids age-appropriate experiences and responsibilities with money, you’ll help them build confidence, independence, and resilience.

And when in doubt, ask your Allworth advisor for help. We’re here not only for your planning needs but also to help your family create a lasting legacy of financial knowledge and well-being.

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