Take Advantage of Challenging Times to Teach Children Financial Literacy

Take Advantage of Challenging Times to Teach Children Financial Literacy

July 13, 2020

This year many families are faced with unprecedented financial challenges and economic anxiety. Our early experiences with money set the template for how we approach work, spending, debt and our ideas about wealth. The way a family chooses to respond to their unique challenges will impact children the most and endure for a lifetime.

The financial climate in a home is based on how money is talked about. Did your parents speak to you with fear and anxiety about lack of money, or did they spin it to something positive and leverage it as opportunity for growth and development? This difficult time is a tremendous opening to provide a framework for our children’s financial literacy. We can include children in discussions about saving, earning, investing, and introduce concepts of debt.

Do your children act like money grows on trees? If they see you effortlessly pulling out a credit card for every purchase or they play video games where they can buy accessories for avatars, it’s understandable why they hold onto that cliché. Introduce practical ways to learn about money and prepare for their future. Keep it simple and realize that, like investing, it’s a long-term process. This means no big terms or concepts for them to comprehend.

Everyone can envision a bucket. Explain that they should divide their money into four buckets: 1-spending, 2-saving, 3-investing, and 4-charity. Discuss the concept of opportunity cost. In other words, if they choose to spend all their money, they would have none left for the other three buckets.

Use real-life stories. Many kids learn best when the concepts are applied in real life, as well as when the learning experience is fun and interesting. Games are a valuable resource for this.


By introducing sound financial habits early on, you’ll give your child a head start to becoming an informed investor.

  • Toddler -- Toys that incorporate counting, such as building blocks, help develop math skills.
  • Ages 5 and over -- Board games entertain while teaching to manage money. Try Monopoly, Game of Life, Billionaire Tycoon, Moneywise Kids, or Payday.
  • Ages 8 to preteen -- Many children start accumulating income from allowances, cash gifts, lemonade stands, or lawn mowing. Talk to them about saving and spending.
  • Teen. Encourage a summer job or part-time work like babysitting. Visit the bank together to set up personal savings and checking accounts in their name.