Search for Savings & Loans
How to Raise Money-Smart Kids: Practical Tips for Every Age!
Family Finance

How to Raise Money-Smart Kids: Practical Tips for Every Age!

Growing up, I wish I had the exposure I have today or better still that my parents had given me these lifelong lessons. My parents were super busy raising all seven of us plus the many cousins who also became part of the household. There wasn’t so much attention accorded to us. I’m not discrediting my parents for they did a good job of instilling discipline, and faith and made sure we grew up with all we needed. However, there were lessons that I wish I learned at an earlier age. Especially on money. 

Having been clueless about how to navigate money throughout my childhood and youth, I have been determined to ensure that my children and those around me do not walk down the same road making the same mistakes I made then. 

Typically, growing up, I either got what I wanted depending on the level of necessity or got denied depending on the same. No explanation. Just move on. This had a big impact on me because when I got to an age where I was meant to make money decisions I did not know how to. This either led to wastage, losses, bad investments, impulse buying, or mismanagement of the money in my possession which also meant I was most of the time broke, borrowing, or in lack.

Read Also: How I am Raising Financially Savvy Kids as a Single Mom

Therefore I purposed to learn how to undo the mistakes I made in my latter years and embark on intentionally instilling money lessons on my kids. Here are some tips on how to teach your children about money:

AGE 3-7

At this age or even younger when our little ones are so cute and full of tantrums depending on how they are raised, it is easy to want to give them anything and everything they want. Or if turned down it comes with threats of a spank or so. At this age they already know that money is needed to acquire stuff and treats therefore it is not too early to start instilling this knowledge in them as early as now.

Here is how,

Show  Them That Stuff Costs Money

This involves allowing them to have a one-on-one experience in paying for items at the shop, or the supermarket. It could even be that item they so badly asked to be bought for. Children cannot be oblivious to this to the point they think they ask and receive or just get a stern NO! With this, they will know that they do not just get stuff and also over time they will learn that some things cost more than others. For example, a car toy will cost more than a lollipop!

While paying for these items, it is better still to have them,

Have Them Use Their Own Money

My daughter, a six-year-old delight has always been feisty and always wanted to be independent. I could say she got that from her momma but hey..who am I to blow my own trumpet? I’m just a careful momma bear, haha. 

So in the spirit of independence, she asked to get a piggy bank and we decided to have our makeshift one that was transparent so that she could easily get to see the money she put in and also an easily accessible one that she does not need to break it to have access to her pennies.

So every time we go to the shop we always have a list of things we will buy. If she comes up with something she needs to buy and I approve depending on how much it may cost, we carefully get some of her money which she even gets to carry to the shop and spend on her own.

Read Also: Various Ways to Teach Your Kids About Money as They Grow Up

The other thing is to;

Set a Good Example with Your Money Habits

They say that the apple does not fall far from the tree. Therefore if your money habits are wanting, your child will also pick up these tendencies from you. Eg, failing to plan and therefore always running short of money, failure to say no even to things that can be deemed unnecessary, and most of all arguing about money with your partner in front of them dents their young minds on matters of money and relationships. Remember, the curious little eyes are watching and eager to learn.

AGE 8-12

At this age, the children have a better understanding of money and things in general. This is where you get hands-on teaching values like earning, spending, saving, sharing, or better yet giving, priorities in money matters. Do not shy away from instilling these lessons because a tree is best bent while young!

Avoid Impulse Buying, 

Most parents have a soft spot for their kids. This is the age at which they are developing a taste, they are extremely competitive with either their siblings or peers. They will almost always want that thing. Now! That means when they come across that thing they find desirable they will most definitely ask for it. Steer away from impulse buying. Instead, create a reasonable plan with them and help them understand the value of having a budget to avoid spending our hard-earned money carelessly.

Read Also: How to Set Up Your Kids to Be Financially Successful

Speaking of hard-earned money,

Teach them to work for their money rather than receive handouts

Rather than giving out allowances, show them how to earn their money by working for it. Get them to do chores and receive a small stipend for it. This will teach them responsibility as they learn how to earn eg. By helping with house chores such as taking out the trash, organizing the rooms, grooming the pet or simply running a simple errand for you.

Once your pre-teen child learns the value of their hard-earned money, then it is also important to teach them the value of;

Budgeting and Opportunity costs

This came with a lot of tears for my son Mike to get a hang of. He always wanted this and was adamant to negotiate. For instance when he wanted to get new sneakers that his best friend had and also was putting aside some money to get a new video game. I sat him down every moment he brought the sneakers up and pointed out that if he chose to get the sneakers now, it would deter him from his plan of getting the video game for a while. Therefore he had to pick which one would bring him joy especially because he had so many pairs of shoes some he had not yet gotten to wear!

Eventually, he was on board and was more elated to even take up more tasks so that he could earn more and get to his goal faster.

Side note; he did so well that term at school term when I asked him what he wanted as a token for the hard work guess what he asked for! You guessed right! The sneakers!! Lol, but at least the lesson was at home.

As my family believes strongly in the power of giving and now and then we exchange gifts, I also taught:

The Value of Giving, 

This goes from donating their toys to clothes they no longer need or use to teaching them how to separate special gifts to give at church and school during events. This has brought so much harmony within them as none of them is hung up on anything as they take joy in giving and sharing.

Read Also: Fun Ways to Teach Your Children About Money


I must admit this is not an easy group to penetrate as they command a lot of independence. At this age they suddenly have secrets and now want to even have a room of their own because they feel all grown up. That is not wrong at all but we cannot shy away from playing our roles in teaching them. Trust me, they will thank you later when they are all grown up and are probably in their own homes with teens of their own to raise.

Now more than ever our teens need to learn further about ;


This could simply be giving them their weekly expenditure money and having them come up with a budget that sees them managing this money to the end of the week. If they manage to cut down on costs and have something left, they get to keep change-literally!

Teach them the value of contentment

Social media is one of the biggest enemies currently and could easily influence your teenager to start wanting things and wishing for a lifestyle that is nothing but vain or even comparing themselves to others.

When they find their classmate has the latest iPhone, they will be compelled to want to have the same. I mean who doesn’t want to be cool.

It is not wrong to want flashy things but at what costs do we want to get them? Help them understand that luxury is not bad but that cannot be the only driving force. And the fact that we do not have such and such a thing does not mean we are worse or lesser beings than the rest.

Read Also: 10 Money Mistakes Your Kids Will Pick from You

Educate them on how to make money

During their free time teach them a skill or have them learn one online that could be a source of income. My daughter Leila loves working in the kitchen. Every holiday she learns a new baking recipe. Last holiday she made some gluten-free cupcakes that she sold around the neighborhood and managed to make some money for herself. Hone your child’s talents and invest in their interests. Help them come up with a way to make money out of it. For instance, if your child is good at playing music, he/she could arrange little shows and have the audience pay a small fee.


As they are learning how to make their own money and become little entrepreneurs, remember to reinforce the importance of saving.

This could simply be for a gift, for their luxuries when they are young adults, for their college expenditures, and the like. Whatever the case, show them, teach them, and even open up their bank accounts for the same!

Help them invest in good financial disciplines;

Rather than scrolling all day and all night on socials, help them see the sense in investing their time in learning good financial lessons. There is plenty of material available online, good books just to set them going. Have these talks with them and make them fun yet realistic. Allow them to know that they are supported and even when they need to make decisions they can turn to you for guidance and support

Wrapping Up

Being a parent is not an easy job. However, you have to be intentional to make sure that those you love the most have a good foundation in that you can be confident of the future that awaits your kids.

Loving them does not mean having them take the easy way out, never saying no to them, or pampering them and showering them with gifts and all their desires. No. Loving them also includes instilling good discipline and life lessons such as money lessons to ensure that they have a bright future as future parents, leaders, bosses, and employees who are money literate. 

No items found.

Get the Money254 App and don't miss out on the next article.

Join 1.5M Kenyans using Money254 to find better loans, savings accounts, and money tips today.

Get it on Google Play
A person holds the Money254 App in their hand.

Welcome to Money254 - your simple way to compare loans in Kenya online.

Money 254 is a new platform focused on helping you make more out of the money you have. We've created a simple, fast and secure way to find and compare financial products that best match your needs. All of the information shown is from products available at established financial institutions that our team of experts has tirelessly collected.

Download the new Money254 App and don’t miss out on the next article.

Join 1.5M Kenyans using Money254 to find better loans, savings accounts, and money tips today.
Get it on Google Play

Learn more about Personal Loans available in Kenya on Money254

Money 254 is a new platform focused on helping you make more out of the money you have. We've created a simple, fast and secure way to find and compare financial products that best match your needs. All of the information shown is from products available at established financial institutions that our team of experts has tirelessly collected.

Instantly search loan products from established providers in Kenya and compare on the terms that matter most to you.
Find the best Personal Loans for me

Don't miss another article - download the new Money254 App Today

Get it on Google Play
Download the Money254 app on Google Playstore

Sign up for our newsletter and get weekly money tips to your inbox.

Get updates from the Money254 team on financial news and new Money254 features.