Activities that Teach Children Financial Responsibility

Teaching children financial literacy from a young age can be extremely beneficial in establishing financial security. Though financial focus may not be at the forefront of children’s minds, there are activities that parents can involve their children in that can promote financial literacy in more exciting ways than simple discussion. Let’s take a look at age appropriate ideas to introduce the financial concepts.

Ages 3-5: Understanding the Basics of Money

Introduce the Concept of Money: At this age, children are learning through observation and imitation. Start by explaining that money is used to buy things, and they’ll encounter it in various forms: coins, bills, and even digital payments.

• Activity: Use toy cash registers and play store with your child. Let them "buy" items and pay with play money. You can also do this by having them help you check out at the store. Let them tap or insert your card into the terminal or hand cash to store clerk during checkout.
• Game: Try a board game like The Allowance Game, where kids can earn and spend pretend money.

Simple Earnings vs. Spending: Begin teaching them that money must be earned by explaining how people work to get paid. Encourage them to use some of their allowance or gift money to "buy" something small they want.

• Activity: Set up a chore chart where they can earn small amounts of money for tasks (e.g., setting the table, picking up toys).

Ages 6-8: The Importance of Saving

Introduce Savings Goals: As children begin to understand basic math, it's a good time to introduce saving. Teach them about saving for short-term goals, such as a new toy or a special activity. Let them physically see their money grow over time, whether through a piggy bank or a savings jar.

• Activity: Use three clear jars or envelopes labeled "Spend," "Save," and "Give" for dividing their allowance. Let them decide how much goes into each jar.
• Game: Play the Savings Spree app, where kids learn to save money for various needs while making decisions on how to allocate funds.

Delayed Gratification: Teaching delayed gratification helps children understand the rewards of saving. Encourage them to wait before spending all their money right away, showing them how their savings can help them buy something they really want in the future.

• Activity: Help your child set a small savings goal, such as a new toy or a family outing and track their progress with a fun sticker chart or a digital app. Use a Kids’ Club account to help get them on the right track toward their goals. Shore United Bank’s Kids’ Club accounts help children get excited about saving by offering prizes for hitting savings goals and a quarterly activity-based newsletter with fun, educational games about money.

Ages 9-12: Budgeting and Smart Spending

Create a Simple Budget: By the time they reach middle childhood, kids can begin to grasp the idea of budgeting. Help them create a simple budget by dividing their money into categories, such as saving, spending, and donating. This is a great way to introduce the concept of needs versus wants.

• Activity: Let your child plan for a family outing or grocery trip. Give them a set amount of money and help them budget for the trip by choosing which items to prioritize.
• Game: In Monopoly Junior, kids learn about money management and making choices that involve spending within a limited budget.

Teach Smart Spending Habits: Teach them how to make thoughtful spending decisions. Encourage your child to compare prices before making a purchase and to prioritize the items that truly matter.

• Activity: Turn shopping into a fun learning experience by giving your child a set budget when buying back-to-school supplies. Encourage them to look for sales and compare prices.

Ages 13-15: The Basics of Credit and Interest

Introduce Credit and Borrowing: Teenagers are ready to learn about more complex financial concepts like credit and loans. Explain how credit works, including the idea of borrowing money that must be paid back, often with interest.

• Activity: Use role-play to simulate borrowing money for a large purchase (like a phone or a bike). Show them how repaying loans with interest can make things cost more in the long run.

Explain Interest and Compound Interest: Introduce the concept of earning interest on savings accounts. You can even "pay interest" on your child’s savings by adding a small percentage each month to demonstrate how their money grows over time.

• Game: Use an online savings calculator together to show how compound interest works over a long period. There are also financial apps for kids that simulate saving and earning interest.

Smart Decision-Making with Credit: Teach them about responsible use of credit, such as not spending more than they can pay off. Highlight the dangers of debt and how it can accumulate if payments are missed.

Ages 16-18: Real-Life Financial Skills

Budgeting for Real Expenses: As teenagers approach adulthood, they should begin to learn how to budget for real-life expenses. Encourage them to take control of their own money by managing a larger allowance with more responsibility or income from a part-time job.

• Activity: Help them open a student bank account where they can learn how to track spending, save for future expenses, and manage debit transactions.

Investing Basics: Older teens can start learning about investments and how they differ from savings. Explain the risks and rewards of investing and how people use stocks, bonds, and other financial products to grow their wealth over time.

• Activity: Create a simulated stock portfolio for your teen. Let them "invest" a small amount of money in a few companies they are familiar with. Track their investments over time to see how the market fluctuates.

Long-Term Financial Planning: Teach teens about long-term financial goals such as saving for college, a car, or even a home. Discuss how to plan for the future by setting aside money for these big expenses and thinking ahead about financial independence.

• Activity: Sit down with your teen and map out potential college costs or long-term savings goals. Show them how budgeting and saving now can impact their ability to afford these things later. Once they turn 18, look in to Roth IRAs, explain how they work, and let them monitor growth.

Game: The Game of Life is a classic board game where players go through different life stages, making financial decisions on careers, housing, and education costs. This is a great way for teens to get a feel for long-term planning.

All Ages: Modeling Financial Responsibility

Involve Children in Family Finances: At all ages, involve your children in some of the financial decisions you make as a family. Whether it’s saving for a vacation, budgeting for groceries, or deciding how much to spend on entertainment, showing how you manage money will set a good example.

• Activity: Let your children help you with small tasks like clipping coupons, calculating grocery totals, or comparing prices when shopping.

Encourage Charitable Giving: Teach children the value of giving back. Have them donate a portion of their allowance or savings to a cause they care about, whether it's supporting a local charity, an animal shelter, or an environmental project.

• Activity: Take part in family charity events, like organizing a fundraiser or giving to a cause together. Set aside a "Giving Jar" so they can save for a charitable donation. You can also take them to local animal shelters and volunteer walking the rescue dogs to help develop compassion and purpose for helping charitable organizations.

Building Financial Skills for a Lifetime

By introducing financial literacy in an age-appropriate way, parents can help their children develop essential money management skills that will benefit them well into adulthood. From understanding the basics of earning and saving at a young age to managing credit and investing as teenagers, children who are taught these concepts will be better equipped to make informed financial decisions. Through modeling responsible behavior and using fun activities and games, you can make learning about money both engaging and educational for your kids.