Research from the University of Cambridge suggests that children begin forming money habits by the age of seven, making early finance education crucial. Starting basic finance education by age three is recommended, as children pick up money habits quickly. Here are some ways you can begin teaching your children about finance:

Introduce basic currency literacy

According to research conducted at Yale University, children as young as 3 years old can identify and retain knowledge about different coins.

  • Teach your children about the various coins and dollar bills.

  • Consider using vacations to teach about foreign currencies and expand their understanding of other countries.

Create money jars for spending, saving, and giving

Using money jars is a fun and simple method to teach your child about finances.

  • Teach your children how to use them and why they are important
  • After receiving birthday gifts or allowance payments, encourage your children to divide the money into different jars. This will help them understand the concept of saving for the future.
  • Use the giving jar to teach your children about the importance of charitable donations. They will learn about the act of giving and how their money can make a positive impact. Encourage them to donate the money to local animal shelters or food pantries.

Use coupons

Coupons teach your children about saving money and making wise shopping decisions.

  • Let your children in the process of cutting out coupons and entrust them with the responsibility of managing the papers while at the store.

  • The Children's Financial Network suggests that even children as young as 5 can gain valuable knowledge on how to use coupons while shopping. This will help them learn the importance of saving money and making wise purchasing decisions.

Set money goals

Encourage your children to set a realistic money goal, such as saving for a favorite toy or item.

  • Establishing money goals is a simple yet effective approach to instilling financial patience and teaching children how to save money.

  • Choosing attainable goals is essential to keep children motivated to stay on track with their savings plan. Smaller and more affordable goals are generally better suited for young children, as larger goals can be discouraging and may cause them to lose interest.

Take your children shopping

Let them use their spend jars to make purchases.

  • Shopping can be a valuable learning opportunity for children. It helps them consider how they will spend their money, whether they will use all their savings at once or distribute them across multiple shopping trips.

  • Visiting a nearby toy store can also offer an opportunity to educate your children on comparison shopping. You can demonstrate how to spot varying prices on similar products and teach them to select affordable options.

  • After the shopping trip, it's important to evaluate the results with your children. This helps them understand the consequences of their choices and think about how they will refill their spending jars.

Yard Sales

Another way to teach children about finances is through yard sales.

  • Yard sales can serve a dual purpose of decluttering your children's rooms and educating them about money.

  • Involve your children in the yard sale by encouraging them to sell their old toys or clothes. Assist them in choosing items they no longer use and determining appropriate prices for them. This experience can help them restock their money jars.

  • Older children can help sell items and learn about price negotiations with customers.


Overall, it's important to start finance education early and to teach children basic money rules and habits to set them on a path towards financial responsibility.