Providing Tools for Parents & Instilling Financial Management Skills for Children


  • Cash Purchases vs. Credit Purchases: Using cash instead of a credit card allows your children to see the exchange of money. This visual can help your children better understand how money works.

  • Visiting a Bank: A perfect opportunity to explain where money comes from.

  • Open a Savings Account: Opening a savings account for your child allows them to understand the value of their finances. Your child can learn to manage their money with a savings account book or using your bank’s online app.

  • Shopping: Demonstrate how you shop. Compare one item to another and decide which is the best fit for you as well as your budget. Shopping can teach the value of your dollar and how important it is to make an educated decision when your purchase an item.

  • Brands Don’t Mean Everything: Store item brands are often less expensive than brand name items. Showing the similarities between two items but different prices can help save money and help your children understand the difference.

  • Needs vs. Wants: Explain the difference between a need and a want purchase. Food helps you survive whereas concert tickets do not.

  • Monthly Budget: Create a monthly budget for yourself as well as your children. You can explain where your money goes each month and what’s left over, and you can have a smaller budget for your children to handle. If you can use software to help teach your children, that is another life skill they can use in the future to help manage their budgets.

  • Utility Costs: Explain what utilities are and how much they cost each month. Explain that by turning off lights when you leave a room or turning off the faucet while you brush your teeth will save money as well as help the environment. Teaches not to waste valuable resources.

  • Wish List: After a budget is set and your children can see how much money is leftover, allow them to have a wish list of items they want. There can be short and long term items. This is a great reward for budgeting correctly (if you budget well enough and money is left over, that can be used for fun).

  • Save Money: A clear jar is useful to have so your children can see the money grow.

  • Donating: It’s important to share money as well. Have a separate piggy bank for money that is to be donated to a charity or organization of your child’s choice.

  • Pocket Money: Take the spare change you have at the end of your day and put it into a jar. Your children will understand the value of leftover change and smaller increments of money as it grows over time. Something small can turn into something big.

  • Open a Business: Operating a lemonade stand or selling items at a garage sale can help children understand a concrete work ethic as well as learn good management skills.

  • Allowance: Giving an allowance in exchange for doing chores each week can help your child understand putting in effort and work will be rewarded. Helps understand what a “job” is as well.

Source: Huffington Post