Telling children about money: teaching the child to be financially intelligent

Every parent wants to see their child happy and successful in their life. However, are they doing everything in order for them to achieve this? After all, our children will have to live in a world where possession of key information is the decision-making factor. Do they know enough about the world of finance? Do they know how to handle and protect money efficiently?

This article focuses on the topic of children’s financial literacy. In it, you will learn how to properly acquaint preschoolers and schoolchildren with the world of finance, what economic concepts a child should know, and you will also receive a lot of useful materials on financial education.


What is being “financially savvy”?


Financial literacy is the knowledge, skills, and abilities that a person needs to possess in order to make well-considered financial decisions, as well as to achieve financial well-being.

A financially educated person is the one who does the following:

  • knows how to handle funds, to preserve and multiply them;
  • keeps track of their income and expenses;
  • gets their way around the economic situation of the country;
  • can recognize signs of financial fraud;
  • fulfills their obligations as a taxpayer;
  • knows how to navigate through banking services.

For a long time, it was considered that only financial and banking professionals require financial knowledge. However, according to the results of an OECD study, although 67% of respondents from different countries admit to being planning their purchases carefully, only 49% have got some form of financial planning in place, and around 4% on average experience financial fraud, with this percentage in some situations being as high as 22%. All of these indicators point to a general lack of financial knowledge and skills.

Therefore, at present, a number of policies are being actively pursued to improve financial literacy among the adult population and the younger generation. Special literature is published for children, economic games and apps are created. Websites and online courses on personal finance management are created with the intention to further educate adults.

Financial education for children


What is its importance?

The world of finance seems far from a child, but only at first glance. In fact, children are strongly involved in the financial life of the family. When they go to the store with their parents, watch ads on TV, or receive the gift of money from their grandparents.

Therefore, it is important to familiarise children with financial and economic relations as early as possible, starting from the age of 5-6 years old. By this time, they begin to gain the skills of logical thinking and an increased interest in the world of adults.

Financial literacy comes in as the child grows up and goes through various stages of their life: the first independent trip to the store, paying for travel to school and back, getting pocket money, etc.

What does a child need to know?

Now, let’s talk about what children need to know about the world of funds and finance. The integrity of information can be split into 5 main groups.

The first category – knowledge about money:


  • what kind of money exists;
  • how can the money be spent;
  • how to count money in the right way;
  • reasonable spending of money;
  • how to learn to save money;
  • ways to protect funds.

The second category – knowledge about the needs:

  • what kind of needs exist;
  • needs and opportunities of a person.

The third category – knowledge about goods available for purchase:

  • getting to know the concepts of “price”, “purchase” and “sale”;
  • what does the price of goods depend on;
  • how to determine the quality of a product.

The fourth category – knowledge about work:

  • what kind of work there is;
  • getting to know different jobs and professions;
  • how to define the output of labor;
  • familiarising oneself with the concept of “wages”;

The fifth category – knowledge about the budget:

  • what is a budget, what does it consist of;
  • family expenses and income;
  • existing sources of income;
  • ways to live on a budget.

This information will help your child to get to know the main terms and to navigate between the basic economic concepts.

Getting the preschoolers acquainted with the world of finances


Psychologists advise starting a conversation about finance when a child develops an interest in it. This usually happens at the age of 5-6 years old. You need to answer your child’s questions at a level accessible to them.

  • Tell the child about the main needs of the family

The son or daughter must come to an understanding that not all of their desires can be satisfied and that the money earned by the parents is to be spent primarily on the main needs of the family.

  • When planning a visit to the store, come up with a shopping list together with your child

If they don’t know how to write yet, let them draw pictures. In the store, stick to this list and ask your child to help you choose all the needed goods. This will occupy the child and will prevent them from insistent requests to buy another toy or candy.

  • Teach your child to choose the right product and to pay attention to quality and the “best by” date
  • Introduce the baby to the professions of all family members, tell them about specific responsibilities

If possible, arrange a field trip to the workplace of one of the parents. Explain to them that each job is important and rewarding.

  • Do not leave the broken things or toys without any attention

Explain that you cannot buy a new toy car because the money has already been spent on the toy that the child broke. Come up with a solution together with your child. For example, fix a damaged toy together.

Since the main activity of preschoolers is playing, it means that the basics of financial literacy will be better mastered in a playful way.

Teachers suggest playing the following financial games with children:

1. “The store”


The child and the adult take turns in the roles of seller and buyer. Both real objects and images of goods can be used.

With children under 5 years old, it is better to use candy wrappers, pieces of paper, or stickers as a method of “payment” for the goods. Older children can already “pay” for the goods with real money: coins or banknotes, which they will receive from their parents.

2. “The Bank”

The game introduces the child to the structure of the banking system and to basic banking operations. Before playing, it is recommended to go with your son or daughter on a small tour to a real bank.

A child and an adult alternately take on the roles of a cashier and a visitor who needs to apply for a loan, open a deposit cell, or put money into their account.

Such role-playing games help children develop the correct behavioral algorithm and master the culture of relationships between people in financial institutions.

3. “Professions”

The child becomes introduced to various professions through games and activities in kindergarten.

Parents, in turn, can tell about the work of each family member and play an entertaining game that reinforces the acquired knowledge.

The kid is offered cards with various objects and tools. Their task is to determine which profession requires a certain object and what their purpose would be.

4. “Learning to deal with money”


In this game, an adult introduces the child to money bills and coins and teaches how to count them correctly.

You can instruct your child to put small coins in a special jar, and at the end of the week, count how much they have accumulated.

5. “I am going to the store”

The goal of this game is to teach a child to distinguish between vital goods and those that can be purchased later, as well as how to stay within the budget.

Images of various goods (bread, milk, cake, a game console, washing powder and others) are laid out on the table. Each image has got its own price tag. It is not necessary to indicate the actual price of the item. If a child can only count up to 10, the price tags should not exceed this number.

The child is given the task to go to the store. They are given 10 dollars and they need to buy groceries, candy for their little sister, and laundry detergent for the home. They cannot exceed the amount of money given to them.

6. “Ads”

This game is well-suited for a group of children. It enhances the development of verbal and logical thinking, as well as communication skills.

Several products are displayed on the “window display”. The task of the “seller” is to advertise the product and answer all the questions of the “buyers” so that the “customer” would immediately want to buy it.

The basics of financial skills for children of school age


At school age, the child has got a direct encounter with the world of money. They start paying for their lunch in the canteen and their transport to school and back and start getting their first pocket money. Therefore, an important task is to form the child’s reasonable attitude towards money:

  • Define the exact amount of pocket money with the child in advance

Plan where and what the money will be devoted for. Explain that if the child buys ice cream with this money, they will not have enough money left to pay for their daily commute.

  • Talk about protecting money

Discuss what needs to be done when someone starts blackmailing the child at school and how best to store the money in order not to lose it by accident.

Make sure that no one threatens your child’s safety nor solicits money while you are not with them. Always know where the child is, listen to what is happening around, and quickly get in touch to help in time by using the Findmykids app.

  • In order for the child to learn how to manage personal finances, draw up a financial plan with them. It should include all of the income and expenses.

You can start with a plan for the month and then continue with the one for 6 months, followed by a yearly outline.

  • The child should know that there are some things that they should never buy, even if someone asks them for it

Cigarettes, alcohol, and all other prohibited substances are part of these items.


  • Primary school teachers advise not to give large sums of money to schoolchildren, since children at this age do not yet know how to take care of money and often leave them unattended and exposed, for instance, in an open pocket of a backpack or on a desk.
  • Involve your son or daughter in family budgeting, shopping and vacation planning. Discuss any possible ways to save money and cut costs together with your children.
  • Nowadays, children’s bank cards are becoming popular, such as the American Express serve, MOVO and Mango Mastercard.
  • With the help of such a card, the child can independently pay for travel, buy meals in the canteen and make purchases at the store. All of the card transactions will be controlled by the parents.
If you decide to get the child their own debit card, make sure that they know how to use it correctly.
  • Do not reward your child’s performance with money. Do not install market relations in the setting where love and trust should reign.
  • Get a piggy bank for your child, so that they can save money for the small things they may need.
  • Promote the development of financial thinking in children.

Solve problem situations, play financial games and read educational stories with your child. Read in the next section about the materials that will help you with that.

Useful materials for parents and their children


3 best cartoons about financial savvy for children:

  1. The Sesame Street, in episodes such as “Elmo makes a choice”.
  2. Cha-ching: earn, save, donate.
  3. The money mammals: saving money.

4 best board games:

  1. Hit the Road– an imaginary trip of the child and their friends, during which they have to manage the budget on their own and overcome arising obstacles.
  2. The Bean game – a game with real dried beans and a savings sheet that allows to work out different scenarios of saving by using the same fixed number of beans.
  3. Monopoly – an economics game that has gained widespread popularity in the 20th century.
  4. The Game of life – similar to the game of Monopoly, in which children get to decide whether they buy or sell a house, go to college and get to choose their career pathway.

5 best online games:

  1. Fruit shoot coins.
  2. Wise pockets.
  3. Peter Pigs Money counter.
  4. Planet Orange.
  5. Celebrity calamity.

6 best books:

  1. Bunny Money by Rosemary Wells
  2. One cent, two cent, old cent, cent by Dr Seuss
  3. A bird like Sergio’s – Maribeth Boelts
  4. The go around dollar – Barbara Adams
  5. The penny pot – Stuart J.Murphy
  6. Rock, brock, and the savings shock – Shelia Bair

Learning the basics of financial literacy is a crucial stage in the development of a child. Knowledge about the world of finance will help them in the future to form the correct attitude towards money and reasonable economic behavior.

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