From Toddlers to Teens: Tips for Talking About Money Management

Money (or the lack of it) constantly makes headlines, but too often we avoid the topic with our kids. Why? Because talking about money isn’t always easy. Yet, if we want to raise financially responsible kids, we need to get talking about money.

Between the ages of 1 and 2, children begin to realize that things have value and that coins and bills are worth something. When both of my kids became toddlers, we gave them each a piggy bank, the kind with a slot for coins. You can get banks in different animals, such as dogs, giraffes, or monkeys. Often children at this age use a bank more as a toy, but that’s okay. They enjoy dropping in coins, taking them out again (if the bottom plug easily comes out), and then putting the coins back in.

As our kids became preschoolers, my husband and I began teaching them the value of coins. This wasn’t easy since nickels are larger than dimes. (Who came up with that idea?) They were quick to understand that pennies are brown and that quarters are the biggest and worth the most. (Yes, there are half dollar and dollar coins, but our kids rarely saw those.) We focused on the four major coins: pennies, nickels, dimes, and quarters.

I also used cash as much as possible when I shopped with my kids when they were young. Using cash helped to make the money we spent more concrete, and we talked about how money was being used. As they got better at counting, I even let them count out the bills and the change for the clerk. (This works best when the total is small, such as around $5 to $20. If you do it for a grocery run, your kids won’t understand why the total may be high, which happened to me once when my 6-year-old screamed “Mom, you’re rich! You didn’t tell me that you’re a hundred-aire!” to a crowded grocery store when the bill was more than a hundred dollars.)

It’s also easier to talk about money when you give kids a weekly allowance. How much do you give? It depends on your income and also how you expect your child to use his or her allowance. Some families include school lunches as part of the weekly allowance (knowing that kids sometimes will not spend their money for lunches). I always paid my kids school lunches through an online payment plan. That way my kids could always buy a school lunch but they couldn’t pocket the change—or keep the entire amount to use as they wish.

When kids become teenagers, give them opportunities to use and to talk about money. One of my teenagers was extremely fashion conscious. He also refused to go clothes shopping with me. So we set up a monthly clothing budget that he could only use on clothes. He had to bring home the receipts and show me his purchases in order to get access to the next month’s clothing budget. At first he would save his monthly clothing allowance and buy expensive clothes, like high-priced jeans or extravagant high tops, but after a few years of only getting a few things, he discovered that second-hand clothing stores could give him a lot more for the money (even though he sometimes ended up looking like someone who slept on the streets). Still, he was learning a lot about using money in positive ways, and we talked a lot about money along the way.

As parents, we can talk about money all we want, but our kids won’t really listen to us unless they’re learning about money by using it. That doesn’t mean we need to give them a lot of money, but it does mean we need to give them some. And when you give kids money, really give it to them. That way when they make poor spending choices—and they will do that from time to time—you can focus on talking through what they’re learning instead of getting upset about how they wasted “your” money.

As kids use their money, they then become more open to talking about money in general. They discover how hard it is to save when there are so many temptations to spend. They find out that their friends will want to borrow money, and your kids will borrow money from other kids as well. All their money experiences will help them become more open to your conversations about how you save, how you budget your money, which charities you support, and what to do when unexpected emergencies occur (such as someone stealing your cell phone).

When both of my teenagers went to high school, they had the option of taking a personal financial management class as a semester elective. Neither wanted to take it, but I insisted. One took it his freshman year (because it was hard to get into the electives he wanted). The other one wants to wait until his senior year. He contends that it’s better to learn about mortgages and investments when you’re older and closer to making those kinds of money choices.

What matters is to talk about money—and to keep talking about money. Talk about money with your kids when the conversations are easy and when they’re tough. When we talk about money well with our kids, we teach them how to think about money and how to make positive choices not only today but in the years to come.

Kids and Money, Parentfurther,

Bank It,

Share, Save, Spend,


I found this very interesting and true, I have small children and teenagers, they earn money each week, and some know how to save my other children just have to spend it as soon as they get it. It is hard to try and teach them about money, but I love your article….

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