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How to Teach Kids About Money

When it comes to your kids' financial future, experts say it's never too early to start talking about money.

According to a recent article in FDIC Consumer News, teaching kids about money early in life makes them more financially independent and has been linked to higher credit scores, higher savings and lower debt levels as they become adults.

Since kids often learn through observation, it's important for parents to model good financial habits and communicate with them about how money is earned and how what you earn impacts where you live and what you are able to buy.

Read on to learn age-appropriate strategies for teaching kids about money.

Toddlers (ages 2 to 3)

  • Play a coin identification game: Start teaching toddlers the names and values of each coin by having them trace and color each coin and match their pictures to the real coins. (A word of caution: Watch your little ones carefully so they do not swallow any coins.)
  • Exchange play money during pretend play: Little ones this age often love pretend play. Use fake money to pay for items at your child's make-believe store or restaurant, or to pay for services like a veterinary check-up for their stuffed animals.
Little kids listeing in classroom and smiling

Preschoolers (ages 4 to 5)

  • Have kids help with the shopping: As you are shopping, talk about how much things cost by showing them the prices on the product tags. At the register, have them hand the cashier any coupons and money (if paying with cash).
  • Give your kids an allowance: Depending on your child, they may be ready to start earning an allowance around age 5. Talk to them about saving money for the future and when to spend money on items they need or want. You can also teach them about donating to charity.

Elementary school students (ages 6 to 9)

  • Start a coin collection: To increase your child's interest in money, consider starting a coin collection with quarters from each state. This may also spark your child's interest in geography and history.
  • Open a savings account: Once your child is ready to start saving money outside their piggybank, consider opening a savings account. WaFd Bank offers a savings account that you can open for just $10, with no monthly fees for kids under age 18. If possible, bring your child into your local bank to set up the account and encourage them to make regular deposits.

Tweens and early teens (ages 10 to 15)

  • Teach comparison shopping: When shopping — in-store or online — teach your child how to compare products and prices, including the differences between generic and name-brand items. Make sure they factor in taxes and shipping costs.
  • Set a budget: By now, your child may be earning money doing activities like pet sitting, walking dogs, washing cars or babysitting (depending on age and maturity level). Consider teaching your child about wants versus needs, and how to create a budget that details how they will save or spend their money.

Mid-to-late teens (ages 16 and up)

  • Discuss the stock market: Help your teen learn what the stock market is and why it is important. Have them track the activity of certain stocks. If they love videogames, for example, have them track PlayStation or Nintendo in the stock market.
  • Open a checking account (if they haven't already): In addition to a savings account, consider having your teen open a checking account where they can deposit paychecks and learn how to use a debit card responsibly by not spending more than they have in their account. Learn more about WaFd Bank's *Free check account.
  • Learn about credit cards: By now, your teen likely understands the basics of using a credit card. It's important to discuss the dos and don'ts of credit card use to help them avoid accumulating future credit card debt. Make sure to explain how interest can add up quickly.
  • Track spending patterns: WaFd Bank offers MoneySync, a free online app-based budgeting tool where you can create and track your spending. This is a great resource for you and your teen.

Need help managing your money?

We're here to help you and your child. Visit to open an account today, or call us at 800-324-9375 to learn more. Also, don't forget to start saving for your child's future education expenses. Learn more about WaFd Bank's Coverdell Education Savings Account.

*Free Checking: Account requires $25, eStatements registration and direct deposit to open. Overdraft and return item fees may apply.

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