Parenting 101: Teaching Kids About Finances and Credit

As parents, we want to protect our kids from harsh realities. But we should not hinder our children’s mental growth, especially when it comes to money. Teaching the fundamentals will help them in the future because they will have a better grasp of the significance of credit. They will bring their financial knowledge to adulthood.

If you have older kids, you might introduce the concept of credit score, credit reports, and identity theft. Doing this will be our indirect way of protecting them from making money mistakes without overstepping your boundaries. But how much of our financial knowledge should we impart to our children?

You might find this task daunting. But do not fret! We have your back. If you do not know what to do first, this article will help you out,

Early Elementary School

At this age, you should stick with simple lessons about cash. At this point, you can introduce real money to them while teaching them counting. Take note that dollar bills and coins are easier for them to understand than credit.

Your kid’s financial education does not have to be complicated. You can also initiate lessons about budgeting. Considering that they may already be receiving an allowance at this age, you might want to introduce the concept of staying within budget.

At some point in their young lives, they may have noticed that you take out your credit card. If they raise questions about credit cards, that is your cue to broaden their financial education. You can reinforce the value of not purchasing something you cannot afford.

If they make further inquiries about credit cards, you can take this opportunity to teach them about credit. You can emphasize the fact that there is no literal money in the credit card. Most importantly, stress the lesson that you would need to pay your credit card purchases every month.

Middle School

If you have kids attending middle school, you can show them your credit card bills. At this point in their financial education, you can tell them how long it takes you to pay off your balance. You can also highlight how much interest you will be paying if you only pay the minimum amount.

At this age, you might be giving your child a regular allowance. If they ask for it earlier than scheduled because they spent all their money, you can revisit the budgeting lesson. But this time, you can associate it with the situation. Instead of giving them money, you can lend them the money and charge them interest.

High School

You can open a checking account for your teenage child with you as an account holder. You can take this action further by attaching a debit card to the account. At this point, you can explain the difference between credit and debit cards. Most importantly, you should also teach them about the risks associated with the former.


Many adults wish that they were introduced to finances early in life. You can make things easier for your kids by teaching them the importance of financial literacy as early as now. 

You can take things further by downloading Kiddie Kredit, one of the best money apps for kids. We understand how important it is to prepare our kids for the future. Download now!