Parents can start teaching their kids about financial planning from a very young age. Starting from as little as three or four, a young child can begin to grasp the concept of money. For example, teaching your child to keep coins they get from friends and family in their piggy bank will teach them the value of money. It will also teach your child the practice of saving money. 

Start Early: Why It’s Important to Teach Kids About Financial Planning?

Research shows that teaching children about financial planning increases the chances of that child growing up to be financially independent. In addition, financially independent adults are less likely to get into unnecessary debt. This is why it is essential to start teaching children the importance of financial planning with practical steps outlined in this article. 

Introducing Basic Financial Concepts: Saving, Budgeting, and Investing

Parents can start teaching their kids about money management when they are under six.  

Here are some of the practical ways to start: 

Saving : 

Does your child get birthday money from friends and family? You can ensure they save some in a piggy bank when they do. You can also make sure they put it inside the piggy bank with your assistance and explain why keeping some money is essential. 

Budgeting : 

Right from a young age, you can start giving your kids pocket money they can use to spend on treats and toys. Then, when your child goes to the shop to buy their toy or treat, you can accompany them and let them know how much they have to spend. Then, they can determine whether they have enough to make the purchase. 

Investing : 

You can get your child into investing with a custodial or a brokerage account. Then, as a parent, you can open an account on behalf of your child and start investing on their behalf.  

Make it Fun: Engaging Activities for Teaching Financial Planning

You can teach your young child about financial planning using interactive methods. Using practical and fun ways to teach your kids about financial literacy will help them absorb what they are learning.  

For example, you can do the following activities with your young child: 

Take them shopping with you 

When you take your child shopping with you and note down all the things you need to buy and how much it costs, they will start to understand more about the value of money. You can also use this opportunity to show the price difference between store-brand and name-brand products. 

Demonstrate how to budget with a Pie

Eating pie can be fun. You can also use the pie to demonstrate how the whole pie represents the monthly salary that goes into paying rent, electricity, water and other house bills. Each slice can be used to represent the monthly expenses. This can be fun to show them how monthly income should be carefully managed. 

Get them an educational investment app

You can start getting your young kids into investing by looking into investment apps for kids. There are many fun investment apps for minors with interactive games and videos detailing how to start investing. Parents can start by searching on google for interactive and fun apps for kids about investing. 

Set Financial Goals with Your Kids

Goal setting with your young child will ensure they remain focused and excited about achieving their long- and short-term financial tasks. For example, if your child wants a brand-new toy or video game, you can help them save towards it. Whether it’s their birthday or pocket money saved, you can ensure that they count it periodically and understand how close or far they are to achieving their savings goal. 

Teach Kids About the Value of Money

Parents can talk to their young children about money to help them understand the dollar’s value. Teaching young kids about money can help them build financial literacy and help them manage their finances later in life.  

Here are some more practical ways you can ensure your child is made aware of the value of money: 

  • Get your child a piggy bank from when they are very little, and help them save towards something. 
  • Talk to them about money regularly and explain why saving for a rainy day is essential.
  • Teach your child to save for things they want to buy. 
  • Teach your child about the difference between wants and needs. 
  • Regularly count the money your child has saved and explain what it could buy.  
  • Give your child pocket money and allow them to budget from that.  
  • Remind your child regularly that money does not grow on trees.  
  • Take your child shopping with you and get them involved in the payment process. 

Make It a Family Affair: Involving Kids in Household Budgeting and Saving

You can work with your child to set up and stick to a budget as a family. There are many practical ways to ensure your kids are involved in household budgeting and saving activities.   

For example:

  • Give your child a weekly allowance and ensure they have an amount they can use towards their daily spending. This will also teach them to save and budget money. 
  • Tell your kids about the household bills. 
  • Show your child the process of paying bills every month. This will help them learn the value of the dollar. 
  • Show your kids how you are tracking your family expenses. Whether it is from an excel sheet or a paper document, you list everything. Then teach your kids to do the same with their daily costs too.


In closing, there are many ways to teach your kids about money. First, you can start talking to your young children about the value of money from when they are toddlers. Take them shopping with you to help them learn about the difference between store and name brands. Lastly, you can set up an investment account for your child and teach them the importance of making their existing money work hard for them.