Teaching Kids the Value of Money

Kids MoneyDo you struggle with teaching your kids about the value of money? It is one thing to teach them wise money management, but seemingly in today’s instant gratification society, which places weight on material good and rewards, parents are battling constantly to try to drill home the message of the value behind a dollar.

One of the main challenges is the fact that value is an abstract concept. To be really effective, you need to tailor your approach and your lesson to a context that is appropriate for the age, skill level and understanding of your child.

Realize that much of this is sequential as well. One lesson will feed into another over time, and the lesson is best learned through repetition!

Hands on

These early lessons are part math, part life skills. Introduce children at an early age to different denominations of change and bills, and have them help you count them out.

Take a trip to the store, and have them find an item equivalent to a certain item- so they can understand the concept of cost.

Needs vs. Wants

As a baseline, start by establishing the difference between needs (shelter, food and clothing) and wants (everything else). Kids often think that simply wanting something is reason enough to acquire the item.

Once they understand that items fall into one or two categories, then they can begin to understand priorities in terms of spending.

There is no Money Tree

Do your kids think, like many others, that all one needs to do to get cash it go to the bank machine- like there is a magic man on the other side feeding through bills at a push of a button.

The earlier that kids can grasp the idea that money is finite, the sooner they will understand (and appreciate) the value of what they have.

Sit them down with you while you are doing budgeting. If possible, use cash, and count out the money you have for the week- for say, groceries.

As you pick up your supplies, show them the shrinking pile, and explain that once this pile is gone, it is gone until you earn more.

Have them do the Shopping

For older kids, have them accompany you to do the shopping. You drive the cart, but task them with finding items on the list within a set range. The challenge could be that they get to keep any change left over!

They will quickly learn the relationship between what is in your cart, and what comes out of your wallet.


Nothing with drive home the message about the value of earning money (and ultimately about spending money) like volunteering your time.

Not only with this make children aware (and possibly grateful) for what they have, it will drive home the relationship between working and earning money.

Allowance with buckets

Many grownups use visual cues for their budgeting, like using jars or buckets to represent their spending.

Once children have grasped the concept between earning and spending, they can earn an allowance. It would be helpful for them to use some of the same budgeting techniques to start lessons early about budgeting, needs and wants and the value of what they earn in relation to what they spend.

Have three different jars: Save, Spend and Charity. Have kids set a goal for spending (either a specific amount or for a specific item) and let them pick a cause that they are interested in to contribute to.