How to Teach Your Kids Safe Spending Habits

The importance of money and spending habits cannot be overstated, but sometimes it’s difficult for children to understand the gravity of it. This is simply because kids don’t have the experience with money and budgeting that adults do.

However, if you start teaching your children about income and the economy early on, it helps foster safe spending habits that will do them well for life. Read on for 25 tips on how to teach your kids about money!

Begin With the Basics Early On

While very young children, such as toddlers, likely won’t retain much in the way of financial knowledge, it’s still important to start teaching the basics of spending and saving early on in your kids’ lives and finances when they reach early adulthood.


Make sure you explain what money is and the basics of spending and earning while your children are still little, so they grow up with this knowledge.

Give Them a Budget

Children can quickly grasp the idea of a budget when you teach it to them. If your child has an allowance, use this system to help them learn about life within a budget. That allowance amount is all they get, so your kids need to use it wisely.

Set Savings Goals

It can be a struggle to start saving without a defined endpoint, so sit down with your child and discuss a good goal to keep in mind for their budget and savings to help motivate them.


You can also break down how long it will likely take to achieve their goal at their current saving rate to give kids an idea of the time frame involved, instead of a vague goal floating in the distance.

Create Opportunities for Them to Earn Money

Even if it’s just doing chores around the house in return for cash, it’s a good idea to get your kids into the habit of working for their money. That way, children grow up used to the fact that if you want an income, you need to put effort into earning it.

Discuss Wants Versus Needs

One of the first big financial discussions parents will likely have with children is the difference between something they want to have and something they need to survive.


Use concrete examples of each type of purchase—the grocery bill that puts dinner on the table versus the newest toy they saw advertised on YouTube. While wants are perfectly valid, kids should understand they take lower precedence than needs.

Find Entertaining Ways to Teach About Money

Make sure not to sit down and lecture your kids about money with graphs and statistics. Instead, find ways to make it fun and memorable.


For instance, kids’ books deal with budgeting, math games to reinforce calculations and other entertaining methods of teaching healthy spending habits and economics without boring kids out of their skulls!

Get Kids To Track Spending

Have your children track their spending to get a comprehensive understanding of money coming in and going out again. They should write down their weekly allowance purchases and what it entails for saving.

Set up a Space to Save

From piggy banks to a first checking or savings account, your child will need a place to put their money and keep it safe. You can often find youth accounts at your bank to help kickstart your children’s savings and spending journey!

Offer Savings Incentives

If your child is saving up for a large purchase, such as a games console or tablet, offer an incentive to sweeten the deal.


For instance, you could match a certain percentage of their savings or give them a money reward when they reach the halfway point, just to help motivate them during the process!

Encourage Older Kids to Get a Job

If your children are old enough and you feel that it is safe, encourage them to find a job outside of the house.


Plenty of kids have jobs at fast-food restaurants, grocery stores, and other young adult-friendly places. Plus, they can feel good about earning money from a source that isn’t their parents.

Explain the Cost of Living

Some kids might see a weekly trip to the grocery store as routine but not think about the repeated cost it incurs.


Introduce children to your monthly budget and explain the relationship between income and the essential cost of living—and where tensions can lie between the two if safe spending habits are not followed.

Don’t Spend It as Soon as You Earn It

It can even be tempting for adults to go on a shopping spree when their paycheck comes in. But not spending money as soon as you get it is a good habit to cultivate, including for kids. Learning to curb impulses will be a lifelong strength for them!

Create a Wish List

There’s nothing wrong with wanting things that are not necessary to survival—it’s part of the basic human experience to daydream. But instead of impulse-buying, teach your kids how to make a wish list for all the items they would like to buy eventually.


Then, figure out the costs and how long it will take to get there. Your kids will likely notice how quickly it all adds up and revise their wants on their own.

Introduce Them to Credit & Interest

It’s never too early to start learning the basics of credit and interest. If your child wants to purchase something over their allowance, offer to loan them the funds and become their creditor—along with everything that entails, including interest charges.


Small-scale scenarios like this are ideal for preparing your children for real-world finances and instilling the importance of healthy and safe spending habits!

Define the Right & Wrong Uses of Credit

It’s easy to view a credit card as an easy-out or something you don’t have to worry about paying until later. You can avoid this type of misleading stigma by chatting with your kids about the right and wrong ways to use credit cards early on.

Leave Room for Mistakes

No one is perfect when it comes to budgeting and finances, especially children. It’s important to always leave room for mistakes and use them as learning moments without using any failures as evidence of their shortcomings.

Make Saving a Habit

While all adults should also be saving habitually, include your children in the process. Take them along when you run banking errands and show them your savings, explaining how long it took to get there, so they understand its importance.

Model Healthy Financial Behavior

If you provide a good role model for your children, they are likely to pick up on your habits quickly and effortlessly. And finances are no different—if you display healthy spending habits and proper savings, your children will find this much easier to do.


Walk them through your decisions regarding spending and help them understand your motivations instead of leaving them in the dark, and it will become a healthy and safe spending habit for the rest of their lives!

Demonstrate the Value of Giving

Kids might not understand charity from the outset, but it’s important to raise them in a house centered around the value of giving to others. Show them your donations and explain why it matters to share earnings with charity.


You may even consider helping your child find a charity that they feel is important, whether for animals or children in need. Then, encourage them to share their money with the organization.

Show How Their Money Can Grow

Encourage safe spending habits by showing your kids how well it can work out. With proper investing and budgeting, bank accounts can begin growing from an early age, and seeing the proof of that is very motivating.

Talk About Money Openly

Try not to view money or finances as a taboo topic within your house. Even if you are struggling, you don’t have to go into depth with your kids, but they should understand the current situation.

Show Them How to Shop Wisely

When out and about, it’s a good idea to share your purchase process and how you determine what to buy to remain within budget. You can easily teach them the difference between brand-name and store-brand goods and their price differences. You could even show them where and how to save using coupons.

Reduce Their Exposure to Ads

Advertisements are specially crafted to make people want things, and kids are no different. Colorful ads with shiny new toys and devices target child audiences spectacularly well, so try to minimize the amount that plays around your kids.