Teaching Kids About Money: How to Balance Saving and Spending Habits

Teaching kids about how to manage money is an important skill that will help them make smart financial decisions throughout their lives. Teaching children to balance saving and spending habits will help them understand the value of money and develop healthy money habits.

It is important that parents and caregivers set good examples and talk to kids about the basics of budgeting, saving, and spending. Teaching children how to save and spend money responsibly will help them become financially independent and secure. By learning how to save and spend money wisely, kids can develop lifelong money habits that will help them build a strong financial future.

Why teach kids about money?

As kids grow up, they will want to spend their allowance on toys and sweets, but that comes at a cost. Teaching children about money will help them make smart financial decisions that will benefit them for their whole lives. Having basic financial knowledge will help them avoid costly mistakes, like having a credit card balance or taking out a high-interest loan. Understanding how money works will help kids make better choices and avoid financial struggles as adults.

Learning about budgeting and saving early on will help kids avoid credit card debt and build a solid financial future. Kids who are financially prepared are more likely to succeed. They are more likely to be financially independent and avoid relying on others for assistance later in life. That ability to stand on their own two feet will help them feel empowered, boost their confidence, and give them a sense of independence and self-worth.

Talking to kids about money

It can be scary to talk to kids about money, but it is important to help them understand how money works. Money is a core part of daily life, and a lot of important decisions involve money. Financial literacy is a skill all kids should have. Talking to your kids about money will help them learn the basics of budgeting and saving.

Start a conversation about money by asking your child how they would spend a small amount of money, such as their weekly allowance. Exploring how they would spend this money will help you understand their spending habits and interests. You can also have a general discussion about how money is used in your household and how it is earned and saved. This will give your child a better understanding of how money works.

The basics of budgeting for kids

Beyond just teaching kids how to spend their allowance, you can also help them understand the basics of budgeting. This will help them plan for future expenses and avoid overspending. The most important rule of budgeting is to know how much money you have and how much you are spending it. Keep a running total of all money coming into your household and the important expenses. This will help you have a full picture of your household finances.

You can help your child keep track of their spending and income by using a spreadsheet or online budgeting tool. There are also many fun and easy ways to help kids understand budgeting. You can use stickers or coins to help them visualize and track their spending. You can also create a budgeting story using pictures or a book to help them understand the basics of budgeting.

Teaching kids to balance saving and spending

As kids get older, they may be eager to start saving for big purchases, such as a car or college tuition. However, it is important to teach them how the basics of budgeting and saving money, even while they are young. While kids should start saving for larger purchases, they should also be saving for smaller, everyday expenses, like school supplies or birthday gifts.

Teach your child to save for daily expenses by setting up an account that they can only use for those purposes. You can also help them set up a savings account to save for larger purchases. Start early by having your child deposit a small amount of their allowance each week into a savings account. This will help them build good savings habits. You can also talk to your child about ways to earn money, such as babysitting or yard work.

Setting a good example for kids

Kids are likely to follow your example when it comes to spending and saving money. If you regularly overspend or carry a large credit card balance, your child is likely to do the same. If you are financially responsible, you can show your child how to be financially responsible as well. Show your child how you save money for important expenses, like car repairs or a vacation.

You can also help your child open a savings account to help them start building good savings habits. If you regularly spend more money than you have, your child is likely to do the same. Regularly review your spending habits and make sure you are not overspending. Avoid charging unnecessary expenses, and pay off any credit cards as soon as possible. This will help you avoid unnecessary debt and bad spending habits.


Teaching kids how to manage money starts with talking to them about money. Help your child understand the basics of budgeting and saving money by tracking important expenses and savings. Set a good example for your child by regularly reviewing your spending habits and avoiding unnecessary debt. These habits will help your child become financially independent and make smart financial decisions.

Kiddie Kredit is a useful app that you can use to impart financial knowledge to your children. Download the app right now and equip your child with financial education for their future!

Evan Leaphart

Evan Leaphart is the founder and CEO of Kiddie Kredit and the co-founder of Black Men Talk Tech. He creates online curriculums for schools, organizations, and families to teach children about the fundamentals of finance.