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Teaching Children to Manage Money

The best lessons learned in life come naturally. Try to include children in daily activities not only to be your helpers but also to teach them free lessons about how to manage their lives and their money more efficiently.


Take Them to the Bank

A trip to the bank can be the most beneficial "field trip" you can take with your children. Open a custodial bank account for each child. Often banks offer childrens' programs that host parties or offer rewards for deposits. If they don't, create your own reword system.

Talk to your child about how the bank account works and why it's important to maintain a healthy account. The earlier you start to impart the wisdom of saving and spending within reason, the easier it will be for your children to manage their money later. After holidays, require that children put a percentage of any money received into the bank. It can be as little as 10%, but it will impart the wisdom of saving.

Shop With Them

While grocery shopping isn't always a favorite outing, it can be a valuable learning experience for children. Keep them busy with a task as you shop and your trip will be much easier.


Older children can bring a calculator and keep tabs on the total of the trip. By realizing how quickly prices add up and by seeing how much the snack she's begging for costs, your daughter may ask for less in future trips (or at least finish the entire bag before begging for something new.)

Smaller children can help find items on the list. I created a picture list for my son when he was small. We put pictures of items we bought weekly on heavyweight paper and laminated it. He had his own picture shopping list. Coupons become a matching game; match the coupon to the product. Now is a great time to talk about the differences between store brands and national brands.

Another great place to teach the value of a dollar is the store named after the item. Dollar stores (those that price every item in the store at $1) teach a basic principle: I have three dollars, so I can get three items. Prioritizing and advanced thinking soon follow.


Teach Them Organization

I know many adults who need to learn the same lesson we try to teach our children: for every new item bought an old item must be discarded.

Teach children to organize and keep their belongings in check. "If I buy a new doll, I need to get rid of one. I don't want to get rid of any of my dolls. Then, I don't need the new one." Hopefully, this is what will run through young minds.

Let kids take part in discarding their items. Have them help while dropping off items at the Goodwill store, and take them inside to look around. Talk about the purpose of the store and the value of reusing items.

Similarly, children enjoy selling their items at yard sales and even online. By putting them in charge of their profits, they are more willing to part with old toys that they have outgrown in favor of the funds to buy new ones they will enjoy. Based on the replacement principle, my son enjoys helping me to list in online auctions the toys that he's outgrown. We usually set a goal; for instance, he can use his earned money to buy a street hockey stick.


I try every day to think about the lessons I want to teach my son so that he will grow into a responsible adult. Even though I'd much rather get in and out of the grocery store as quickly as possible, it's hard to pass up the free education it offers.

About The Author: Kelly Ann Butterbaugh is a freelance writer who regularly contributes to a variety of magazines and has written a history book for middle readers.

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