Private: Articles

It’s Child’s Play: 8 Ways to Teach Kids Financial Basics

24 May is Alphabet Day in Bulgaria. It’s a celebration of learning, literacy and culture. Knowing how to read and write, getting to grips with Maths are all undoubtedly great achievements. They open up the world to a child.

But you know what? There was a much overlooked lesson I picked up in first grade. I got my first taste of financial independence: it was up to me to decide what to buy with my pocket money and I couldn’t complain to anyone if I chose poorly! With limited funds, I had limited choices. It wasn’t until I started earning my own money 10 years later, that I got more choices, but even then, part time jobs couldn’t foot much spending. The upside of making the most of a small budget is that it made it easier to start saving when I got a full time job. I’ve kept it up.

So how do you help kids learn that? You know, give them a head start in life. Bestow the gift of financial literacy.

Child’s play. Literally. Use games and stories. Reward initiative, street smarts and long term thinking.

Everyday life presents plenty of situations that lend themselves to instilling good financial habits. The thing is, this shouldn’t sound like work. Here are a few tips to make learning financial basics a fun experience.

1. Make a game of it

To younger kids, pretty much anything can be a game. My six year old nephew had £20 from his grandad to spend on treats. He wanted Gummy Bears, but it turned out he didn’t appreciate how many bags that was and lots of the same is boring! So we turned it into a challenge: how many different things could he buy. Worked a treat, although he drew the line at buying gifts for others from “his” £20. Fair enough: it’s just as valuable to understand the limits of your budget as it is learn how to prioritise within it!

Turn saving into a competition. An easy way to start is by labelling piggy banks (or accounts): “Treats” “Save” and “Give”. For example, figure out together how much they need to set aside from the weekly allowance to save for a ticket to an amusement park or an iPad. You always can match fund bigger “wants” to make them achievable within a reasonable time frame. Praise and award prizes for achievements.

2. Read with them

Money Smart World has a range of books for 5-8 year olds that teach kids about saving, spending, budgeting and planning, sales and giving. (For older children and teens, there are workbooks on money management and budgeting, but frankly, learning by doing is best.)

3. Play board games

I’m a big fan of Monopoly. It’s a classic for a reason – you learn about pay checks, buying assets (i.e. investing), saving for a rainy day (“get out of jail” card) and even about taxes, mortgages and negotiating deals. There are many versions, including for younger kids.

Alternatively, try The Game of Life (about life choices, jobs, family), Cashflow 101 (investing) or Payday (budgeting). An interesting new game called Charge Large hones in on credit cards but promotes wise spending: the winner must have a cash balance and be debt-free. Talk about life lessons!

4. Play online games

You can start with simple ones for preschoolers such as Perry’s Pennies. Edutopia singles out Bite Club, Financial Football and Gen i Revolution as favourites for older kids. The online versions of board games also count, of course. Or go for financial education apps.

5. Teach by doing

Turn their allowance into a teaching tool by linking it to work and achievement. Think about it: Is it not a bit disingenuous to just hand over cash on a weekly basis? Are you sure it won’t result in a sense of entitlement? Investopedia advises creating “home jobs” to instil work ethic and turn the allowance from a handout into a reward. Likewise, if it takes work and sacrifice to buy what you want, you’re more likely to appreciate your possessions and you will certainly learn about prioritising needs over wants in the process.

Budgeting is simple in theory, but hard in practice. Fortunately, there are allowance apps to manage income and spending, so you can make it very real life … with parental control and guidance attached. It’s all a step toward turning financial planning into a habit.

6. Show them how to give meaningfully

Sponsor a child (e.g. through Plan or World Vision) or an animal (e.g. World Wildlife Fund) and involve the kids, ideally by inspiring them to contribute from their own piggy banks or birthday money, or by fundraising. Giving is under-appreciated. Consider this: you are prepared to give money away for the promise that it will do good. How much more powerful if you can follow in real time the impact of your generosity! “Adoptions” are long-term, like an investment: they seek to protect and improve an environment, treating the problem, not the symptoms. It’s but a short step from giving with purpose to saving with purpose.

7. Foster the entrepreneur within

UK charity Young Enterprise works with children and young people in educational settings. But you don’t have to rely on outside help. More likely than not, they know all about saving, rewards and penalties. Just consider the solution to the snooze button and the Helping Hands app in this contest for fifth graders.

Need inspiration? How about 9 year old Alina Morse, CEO of Zollipops, a start up which produces healthy lollipops? Or 10 year old Mikaila Ulmer, who got a $60,000 investment from Shark Tank (the US version of Dragons’ Den) for her BeeSweet Lemonade. It’s never to early to start a business.

8. Strive to be a good role model

A recent study by the University of Chicago concluded that there is a very strong relationship between children achieving financing success and financial habits formed in the family such as learning to save and how to manage money. So don’t shut kids out of financial decisions – share the responsibility of making choices. Money may not buy you everything, but being comfortable with money and financial decisions in an invaluable lesson to teach.


As with everything else, financial education should be adapted to a child’s age. Make it relevant but don’t underestimate kids’ abilities. If you need guidance, check out Money as You Grow which features activity suggestions not just goals. It covers ages 3-5, 6-10, 11-13, 14-18 and 18+.

Even the youngest of kids will quickly figure out that you need money to buy things, but when credit cards come into play it gets confusing. Before they start school, kids should learn that people earn money by working, that there’s a difference between needs and wants and that you may have to wait to be able to buy what you want. Explaining that certain food items are essential, but sweets are treats is a good place to start during a shopping trip.

By the time they are getting ready for college, they should be able to prepare a budget and know why they should stick to it … rather than fall back on a credit card, hoping for a bail out. And if you’re there already, pass on The Money Charity’s Student Money Manual to your teenager.

Please share how you get along and your own tips below.


Leave a Reply