Money concepts for each age

Money concepts for early childhood

Children can begin learning about money in their preschool years. Show your child money. Examine the shapes and values of coins and bills with them or make pretend money out of paper. Help them count, sort and match bills and coins.

Introduce basic concepts

Introduce financial concepts while you play pretend with your child.

Help your child understand that:

  • money is used to buy things
  • people work to earn money
  • there’s a difference between what you need and what you want

Read and play games to reinforce money concepts

When you read to your child, find stories that have to do with earning, saving or spending.

Play games when shopping, such as comparing items to see which is least expensive.

Encourage your child to pretend:

  • they’re going to work and getting paid
  • they’re going to the bank to deposit or withdraw money
  • they’re going shopping
  • they’re running a business

Money concepts for school-aged children

Once children start school, they’re able to understand more complicated money concepts. These include the ideas that:

  • people have a limited amount of money to spend
  • there are choices when it comes to using money
  • money spent on one item means less money for other items or activities

You can help your children learn to:

  • save money to buy something they want, such as a toy or game
  • divide their money into saving, spending and sharing

Use jars for saving goals

Children can use jars to divide up their money. Have a jar for money to spend and one or more for money to save. Provide a separate jar for each savings goal.

Money concepts for preteens

Once your children are between 9 and 13 years old, help them:

  • recognize the difference between needs and wants
  • understand the importance of saving some of their money
  • learn the value of an emergency fund
  • make a savings plan for short-term and long-term goals
  • create a simple budget for an activity or event
  • understand that families have regular financial commitments to meet
  • learn how families use household income to meet these commitments
  • understand how advertising can influence their buying decisions

Work out the real cost

For older children, have them calculate the total cost of an item, including taxes. If they earn money at a job or doing chores, have them figure out how long they have to work to pay for the item. This will help them understand the value of money.

Make sure your children know they‘ll have to pay taxes when they spend their money. Explain that taxes pay for many things, such as schools, hospitals and roads.

Teachers, find a curriculum for teaching about taxes.

Let children plan and budget for a special activity

To help children learn about budgeting, let them plan a special activity.

For example, get children to plan a trip to the movies, a fair or a show.

Ask them to do the following:

  • find out the cost of admission for the entire family
  • think about other extra costs, such as parking or food
  • talk about ways to reduce costs, such as taking public transportation or eating at home before you go
  • track savings progress made toward the special activity

Money concepts for teens

Help teens learn about:

  • the pros and cons of different payment options such as cash, debit cards and credit cards
  • credit reports and scores
  • the different kinds of basic investments, such as GICs, stocks, bonds and mutual funds
  • why living within your means is important
  • how inflation means money you have now won't be worth as much in the future
  • how much of your income goes to taxes and what taxes pay for

Help teens consider all of their choices when they spend or save their money. For example, explain how spending money means they miss the chance to earn interest if they had invested that money instead.

Encourage teens to save

Once children get a summer or part-time job, encourage them to save some of their income. Help them set up an automatic transfer of some of their income to a savings account. This can help teens reach long-term savings goals such as paying for post-secondary education.

Get tips on setting savings and investment goals.

Show teens the household budget

Show teens your household budget to help them learn about real-world costs. It will also help manage their expectations so that they're in line with what your family can afford.

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