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Spending Money

Updated: May 5

How to teach kids about spending money.

A little girl pushing a shopping cart

Teaching children how to spend money is an essential life skill that will help them make good choices with their resources. Without a foundation on how to budget and think about money, kids are more likely to misuse money and make poor financial decisions. Teaching solid spending habits and the value of money early on can help to avoid debt and save for the future instead.

Tips on how to teach kids about SPENDING money

  • Start by explaining what spending means. Spending is using money to purchase something we want or need. Emphasize that spending is about making choices and being responsible with our resources.

  • Teach about different types of spending. This includes needs versus wants. Needs are things that we must have to live, like food and clothing, while wants are things that we desire but aren't necessary. Help children understand the difference between needs and wants, and encourage them to prioritize their spending accordingly.

  • Encourage responsible spending. Teach them to think before they spend. Help them understand the value of money by showing them how to compare prices and quality of products. Encourage them to save their money for something they really want, rather than spending it on impulse buys.

  • Teach children about setting a budget by giving them a set amount of money and helping them decide how to spend it. Encourage them to keep track of their spending and stay within their budget. This will help them understand the importance of living within their means.

  • Lead by example. Show them how you spend money by setting a good example yourself. Talk to them about the importance of being responsible with money and how it has helped you make good choices in life. Also share your mistakes so they can learn from them. Show how you also set aside money for saving and giving.

  • Encourage them to save and to give. When your kids save or give money, be sure to praise them and let them know how much you appreciate their efforts.

By teaching your kids about spending money, you're helping them develop a lifelong habit of financial responsibility. This is a valuable gift that will benefit them throughout their lives.


Tips for talking to your kids about SPENDING:

  1. Teach the difference between Needs vs Wants.

  2. ACTION: Use a simple analogy like food and toys. Explain that food is a need because we need it to survive. Toys are a want because we don’t need them to survive.

  3. Teach to prioritize spending

  4. ACTION: Involve kids as you prioritize your own spending.

  5. ACTION: Make a grocery list and demonstrate comparison shopping. Let your child help pick items at the store.

  6. Encourage and teach the value of saving

  7. ACTION: Encourage saving a portion of any money received.

  8. ACTION: Give your child small amounts of money to save for specific goals, such as a new toy or a trip to the zoo. This will help them learn the value of saving and working towards a goal.

  9. Teach delayed gratification and the importance of waiting. This can help diminish impulsive buying habits

  10. ACTION: Have your child choose a future purchase and wait to buy it.

  11. ACTION: Start with small things, like waiting for dessert after dinner.

  12. Encourage and emphasize the value of giving

  13. ACTION: Set aside money for charitable causes. Choose these charities together.

  14. Offer choices

  15. ACTION: Allow your child to make their own choices by presenting options and talking through the consequences

  16. ACTION: Talk about the importance of making good choices (ie. NOT spending all of his/her money on one thing or NOT buying things that he/she doesn’t need).

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