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Financial Literacy for Kids

Financial Literacy for Kids

According to Standard & Poor’s Ratings Services 2014 Global Financial Literacy Survey, just 33% of adults worldwide are financially literate. That means that most adults probably suffer from making bad financial decisions. Their poor money management skills may cause them to spend unwisely, which could lead to debt or even bankruptcy, which could then lead to a lower standard of living and increased stress.

How do we ensure that our children have a better financial future? Most parents inculcate other values: it’s important to be honest and kind and hardworking. It’s equally important to teach your kids the value of money; their futures may depend on it. In this blog, we’re going to look at ways you can teach younger children and teenagers some important tenets of financial literacy.

Spending Financial Literacy for Kids

Even a trip to the grocery store can be a learning opportunity for younger children. Talk to them about what you’re doing and explain the concept of exchanging money for goods or services. You can help them to be smart shoppers by showing them how to compare prices of similar products and search for items on sale. When they get a little older, you can involve them in the decision-making process. For example, there may be many boxes of cereal at varied price points. Talk to your children about which one they want to buy and why.

Teenagers may have their own money to spend. Try to strike a balance between talking to your kids about how they spend their money and allowing them to make their own mistakes. For example, you can discuss why buying one item will mean not being able to afford another and the importance of weighing up your options before committing to a purchase. However, if your teenager makes a money mistake, like blowing their entire month’s allowance on jeans that they never wear, don’t berate them. Instead, talk about their decision and tease out together why it wasn’t ideal.


Many adults struggle with saving, so it is certainly a challenging topic for younger children! However, you can start by introducing the concept of delayed gratification. We don’t always have to have everything we want right away. You can also use a piggybank to help little ones get into the practice of saving.

You can discuss saving in more concrete terms with teenagers. Discuss budgeting more generally and advise them to save 20% of their allowance each month. You can even create incentives. For example, if they save 20% of their allowance, you’ll match this amount. Together, you can even set a financial target for them to work towards. You can also teach them about banking by opening a savings account or giving them access to an account you opened when they were younger. Use online banking or a banking app so they can see their money growing.

Active Learning Financial Literacy for Kids

Games are a great way to teach children of all ages about money. For children learning to count, add or subtract, you can teach them using real money and help them to differentiate between the different bills.

You can play board games to teach older children financial literacy. They’ll love playing Monopoly, The Game of Life and Payday and they’ll be learning too. If we consider Monopoly, it teaches children about managing money, building a property portfolio, paying taxes and negotiating, among other important skills.


You may want to wait until your children are teenagers to teach them about investing. Investing starts with determining an investment goal, so you can tell your children the different reasons why people invest and discuss different investment styles. Practice investing with virtual stock markets. Or you can invest a small amount of money in a real company that your teenager chooses. In a world where many people are afraid of investing, your message should be that smart investing is just another way to make money and secure your financial future.

Finally, remember that one of the best things you can do to help your children be financially literate is to set a good example. Your great example and your life lessons will empower them to have a bright financial future.