Whether your kids are toddlers or teens, there’s never a wrong time to start teaching them about money management. Keeping track of your finances is essential to maintain your fiscal health, pay off debts, and save for long-term goals.
If you’re not sure how to introduce the topic, consider the tips below. From setting an example to trying a fun activity, there are plenty of fun ways to teach kids about budgeting.
Set a Shining Example
One way to teach your kids about budgeting is to set an example. Ideally, you should already have a budget that outlines your income and monthly expenses, such as mortgage or rent payments, utilities, groceries, car insurance, and more. Sit down with your children and go over this list.
Review your spending and explain where the money you earn goes. With the money that you don’t spend each month, explain where you put it and why. This opportunity is an excellent time to talk about the importance of saving and why you shouldn’t spend every penny you have.
Discuss Needs vs. Wants
When talking about money and how to budget it, explain needs vs. wants. If your children are in school, they’ll likely notice their peers have items they don’t — certain clothes, toys, accessories, etc. As a result, they may ask you to buy them things.
Use this moment as a teaching experience. Help your children identify what they need, such as food, water, shelter, and clothing, and the things they want, items that are nice to have around, such as toys and electronics. Discuss how, when you earn money, you have to decide how to use it. If you spend it all on what you want, you won’t have enough for what you need.
Walk Through Stores
It may be hard for your child to understand the true cost of certain things if they’ve never bought the items themselves. Next time you go to the store — whether it’s for groceries or clothes — take your child along. When you add something to the cart, indicate the price and show them how to subtract it from your budget.
Talk about the cost of items versus income. For instance, say your child earns $20 per month as an allowance. If they want a video game that’s $40, they’ll have to save for two months. Afterward, they’ll have depleted their savings and will need to start from scratch.
Start a Chore Routine
A child who lacks any work experience may not understand the value of a dollar. To help them understand, determine chores they can complete that they’ll be given an allowance for. For instance, you may ask your child to take out the trash, empty the dishwasher, and help fold laundry. In exchange, they can earn $20 each month.
If your child is old enough, you can also encourage them to apply for their first job. Some first-time positions could include retail cashier, dishwasher at a restaurant, lifeguard, babysitter, and camp counselor.
Try a Money Activity
Kid-friendly activities are a great way to learn more about money. If your children are young, try reading an age-appropriate book, such as “Curious George Saves His Pennies” by Margret & H.A. Rey. This book centers around the importance of saving up to purchase the items you want, like a toy.
Another option is “One Cent, Two Cents, Old Cent, New Cent: All About Money” by Bonnie Worth. This Cat in the Hat book provides a simple, easy-to-understand look at the history of money, including banking and minting coins. Once done reading, ask your kids what they’ve learned.
Open a Bank Account
Help your child set up checking and savings accounts online. Teach them how they can deposit money and how funds in savings will earn interest over time. As your child watches their balance grow, they’ll get excited and want to add more.
Teach your kids how to write checks and what they may need them for. For instance, many people use checks to pay for rent or utility bills. You should also teach them the importance of monitoring their account, which they can do online or from a mobile device.
How to Teach Kids About Budgeting
Budgeting isn’t a complex topic that requires textbooks and visual charts to teach. Try some of the fun tips above, such as walking through a store or opening a bank account. With a push in the right direction, your child will become more money-savvy and ready to take on the world.
PSECU members have access to a great member perk – a free1 subscription to Greenlight. Greenlight is a banking app2 designed specifically for kids and teens to help teach them about money management in a fun, hands-on experience. With Greenlight, you can set up automated allowances, create savings goals, and monitor your child’s spending all from your own dashboard. Greenlight teaches kids financial literacy by allowing them to track their spending, learn budgeting, and start saving. Be sure to check out Greenlight.
To learn more about budgeting your finances, check out our Resource Center.
The Greenlight card© is issued by Community Federal Savings Bank, member FDIC, pursuant to license by Mastercard International.
1PSECU members are eligible for the Greenlight SELECT plan at no cost when they connect their NCUA-insured PSECU checking account as the Greenlight funding source for the entirety of the promotion. PSECU debit cards are not eligible for this promotion. Subject to minimum balance requirements and identity verification. Upgrades will result in additional fees. Upon termination of promotion, customers will be responsible for associated monthly fees. See terms for details. Offer ends 7/30/2025. Offer subject to change and partner participation.
2Greenlight is a financial technology company, not a bank. The Greenlight app facilitates banking services through Community Federal Savings Bank (CFSB), Member FDIC.
