There is not a one size fits all approach to teaching your kids about money. We all come from different backgrounds, and each child has their own unique personality and learning style.
If you’re a parent to multiple kids, you already know that what clicks for one child might completely miss the mark for the next. And that’s okay. Your approach can (and should) adapt.
But no matter your parenting style, there are four key ways to use money that every child should learn: spend it, save it, invest it, and share it.
1. Spend It: Needs vs Wants
A significant portion of a child’s first understanding of money is around how to spend it. They watch their parents go to the store and shop around for this and that – buy a toy or buy groceries for the week and they naturally start connecting the dots between money and purchases.
They associate money with spending and that’s important and they learn this without much direct guidance from us.
The next step will take effort on your part and open conversations with your children about money. Taking the connection between money and spending one step further to help them understand the difference between needs and wants.
We can discuss with them about the reality that we have to use our money towards items we need to live. That we buy things that provide us security – like a home to live in. Like clothes – to keep us warm. Like food – to keep us from going hungry.
But we also have freedom to choose to spend on things that will make us happy or bring us joy – items we may not need but are adding value to our lives in a different way.
Help them to understand their options and give them the freedom to decide if it’s something worth their hard earned money or not.
When you let kids make their own choices with money (even small ones), they build confidence in decision making. Spending becomes intentional instead of impulsive, and they start learning an important life skill: aligning money with values.
2. Save It: Building Discipline and Patience
The conversation will start shifting gears that not only is money utilized for spending, but saving is a significant element to our money journey as well. Connecting the idea that not every dollar earned needs to be spent right away.
Learning to save is an essential money habit as it teaches children the idea of discipline and delayed gratification – a skill that will serve them for life. Saving also introduces the idea of creating a goal and making a plan to achieve it.
We can help our children in understanding that if they want that one particular item, but don’t have enough money for it yet, that there are steps that can be taken to be able to afford what they want.
Guide them to problem solve and identify ways to find a solution. If there’s a toy, game or experience they want, guide them through the process of:
- Setting a savings goal
- Tracking their progress
- Brainstorming ways to earn extra money (chores, lemonade stands, or babysitting when they get older)
They will understand that savings also provides them a level of freedom, independence and even security. This awareness will help build their confidence around their own money decision making skills.
They will start to ask themselves questions like:
- Is this worth it?
- What do I need to give up to reach my goal?
- How can I solve the problem to make it happen?
Those questions are the foundation of strong financial decision making for the rest of their lives.
3. Invest It: The Power of Growth
Helping kids to understand the power of investing will be an invaluable tool for them as time goes on.
Most kids (and let’s be honest, most adults) think money only grows when you earn more or save more. But investing introduces the idea that money can work for you.
For them to understand that there are ways to invest your time, invest your resources and invest your money on things that will in turn create more opportunity or more growth. Ultimately the message here is, there isn’t one solitary way to make money.
Keep it simple:
“If you have $10 and invest it wisely, one day it could become $15, just because you made a choice not to spend it and you let it grow over time.”
This is where you can start teaching patience, discipline, and the magic of compound growth. Kids begin to understand that money isn’t just for spending today, it can also create bigger opportunities tomorrow.
4. Share It: Gratitude and Generosity
This is one of the most powerful money lessons you can teach: the joy of giving.
Help your kids see that money can make a difference in someone else’s life. Whether it’s donating to a local cause, sharing unused toys with other children, buying supplies for a food bank, or helping someone in need, sharing teaches:
- Gratitude for what they have
- Compassion for others
- Responsibility to use resources for good
And when kids experience the joy of giving, it sticks with them for life.
It’s an opportunity for them to understand their own opportunity and their own blessings and connect that reality with a desire and responsibility to share it with others in a meaningful way.
There’s No Single Way to Teach Money Lessons
Your family values, your money beliefs, and your kids’ personalities will all shape how you teach these lessons.
But no matter how you do it, these four uses of money, spend, save, invest, and share give kids the foundation they need for financial confidence.
Money isn’t just about transactions. It’s about opportunities, responsibilities, and choices. And when kids learn this early, they grow up feeling empowered instead of overwhelmed and stressed by money.
Resources to Go Deeper:
- Past blog post: The 3 Ways to Save for Your Children’s Future
- Follow @finpoweredfemale for daily tips on money, investing, and building wealth with confidence
- Subscribe to my weekly newsletter for personal finance tips
