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Simple and Fun Ways to Teach Your Kids About Money

Home is the first school of a child, and parents are his/her first teacher. The role you play in your child’s life is huge. From teaching them the small things like walking and talking or how to be good kids, you also prepare them for their future, and this preparation should include teaching them about money.

Kids usually find the idea of money boring because it’s mathematical, but it can be simple to incentivise the learning process for them by using fun teaching methods that make it easier for them to understand it. You can start talking to your little one about money when they are around the age of 5 years and above as they will begin to understand mathematical concepts.

Ages 5 to 6: Simplify Savings - make them “transparent”

Encourage your child to put their weekly or monthly pocket money savings into a transparent jar. Over time, watching the jar fill up will help your children understand how small savings can matter in the long run. At a younger age, children tend to think in terms of shorter periods and immediate effect, so this activity can help them understand that a small saving every day can become a big amount in maybe a month. You can take the jar to the bank once it is full and open a bank account for your child to help them take in the idea of banks, one step at a time.

Ages 6 to 8: Teach Them Where Money Comes From

Explain the concept of earning with a simple exercise - give them their allowance based on their chores and behaviour. Help kids understand that you earn money when you work. They are more likely to save their allowance, or spend it carefully.

Ages 8 to 12: Ask Them To Track Spending

Ask your kids to write down whenever they spend their allowance. So if you take them to the store and they use their pocket money to buy something, they have to mention it in their log. This can be a good habit for the future when they have dues to clear or when they’re trying to save money, or simply track expenses.

Ages 12 to 18: Decision-Making and Long-term thinking

Teach your children that there will be unlimited wants, but money is limited, and therefore they need to decide what they want or need more, and make wise choices while spending their money, based on pricing, quality, use, returns and more. Allow your kids to understand what a wise versus an unwise expense is.

You should also ask them to start planning long-term goals like higher education so that they can learn how today’s spending or saving can impact future plans. It will also help them prioritise and make choices that benefit them.


It’s quite easy to raise kids with smart spending and saving habits. Allow them to associate savings with their goals. Explain investments to them as ways that mom and dad save money for them, so that they can be a doctor, a scientist or a writer, when they grow up. They will understand that savings and investment are a route that helps them fulfill their dreams. As their parent, you can lead by example. HDFC Life investment plans help you create wealth for your and your child’s future by helping you save ample amounts with the help of regular investments. A small saving now will make all the difference tomorrow.

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