Finance for children and financial education

Finance for children and financial education

Finance for children and financial education

A healthy financial life brings many benefits, mainly generates greater economic planning and improves mental health because it reduces stress by providing a sense of greater stability. Therefore, financial education is essential, especially from an early age, since it becomes a fundamental aspect in the future of children. 

Thus, the basic concepts of finance provide tools for them to make smart decisions in the future and become aware of the importance of sound practices, such as saving, investing and good money management.

If you want some tips on how to take the first step in financial education with your children, take note.

The first thing you need to define is what finance is, don't you know it?

What is finance? 

Finance refers to money management. So it is not uncommon when talking about it to also mention income, expenses, debt, investment and budgeting. In short, learning about finances means using money wisely and making decisions to take control of one's finances.

Explaining these concepts to a child can be a bit complicated, however, in this case examples are often a great input, you can explain the concept of saving with a piggy bank, you can guide them to plan their expenses, and even lend them money for something they want so they see it as debt.

Why is it important for children to learn about finances? Long-term benefits

In addition to providing skills needed to manage money responsibly, some long-term benefits are:

Financial independence

Children who learn about finances from an early age acquire skills to become financially independent in the future. They learn to manage their money, set financial goals and make smart choices. They don't squander money.

Informed decision making

 Financial education helps them understand the implications of their financial decisions. They learn to evaluate options, compare costs and benefits, and make decisions based on information, not impulses.

Avoid debt and financial problems

 Learning to manage money and avoid excessive debt is essential. Financially educated children understand the importance of living within their means and avoid falling into financial problems in the future. In other words, they do not live on their savings.

Developing healthy financial habits

Financial education teaches children to save money, set realistic financial goals and develop budgeting habits. These habits will stay with them throughout their lives and allow them to achieve financial stability.

How to teach financial education to children? 

There are a few strategies to teach children about saving, budgeting, investing and debt, the best of which, without a doubt, is through play. 

There are board games like Monopoly or Cashflow that become very simple tools that allow children to learn how to invest money, the importance of paying and 'buying' consciously without the need to spend every penny. So incorporating these games into children's routines can be beneficial, obviously if the game is accompanied by an explanation that makes them understand that the same thing happens in real life.

Practical activities to teach finance to children

There are also very practical activities to teach finance to children, here are some ideas:

Give them an allowance and let them manage it

A fixed allowance, either weekly or monthly, helps children understand that money is limited and therefore they should manage it well and not spend it on one thing. The idea is that they don't spend money (i.e., don't spend the allowance) before they have earned the other.

Teach them what money is, that they feel deserving of it and know its value

Children should not grow up with the belief that money is bad, because that will limit them when they grow up and will make them grow up in many cases with fear regarding financial issues. Teach them that money is earned through hard work and that it grows with smart management and responsible projections and spending.

But before they learn about finances, the child should know addition and subtraction correctly, for this you can offer them games to learn mathematics or buy from them one of the Kiddus watches with which they will learn the numbers and will practice every time they want to.

Buy yes, but in an intelligent way

Take him to buy, food, clothes, whatever you want, but let him understand the importance of being a responsible consumer, how do you do it? Teach him to compare prices, brands, show him how to establish purchase priorities, if he sees it from an early age, it will be easier for him as an adult.

Download an app

There are some apps focused on children that teach them financial education, based on everyday life, for example: Life Hub, Banqer or Goalsetter. These apps usually use games for children to learn in a simple and fun way and with terms that are very familiar to them, about saving, investing and money. Don't waste any more time and try them, they will love it, it will teach them and keep them entertained!

How to help children save? 

Encourage saving! To make children want to save, you can start by giving them a very useful gift: how about a piggy bank? This encourages them to learn to save money for a specific purpose. Help them set a savings goal to buy something they want, make a savings plan to achieve that goal, so they stay motivated, let them set a savings budget according to their possibilities and encourage them to do it.

You can also open a bank account for them, there are some banks that have a children's account option, in which they give children several advantages, such as participating in activities to encourage their financial management skills.

It is also important that you take this teaching calmly, do not go 'crazy' wanting the child to be a businessman from the first moment, remember that he is a child and what you have to try to do is that he has good habits that are reflected in a good relationship with money and that these habits last over time.

How to teach children to invest their money? 

For children to learn how to invest money, the first thing to do is to teach them the difference between necessary expenses, investments and unnecessary expenses, if you can show them that the latter do not bring any benefit, it will be easier for them. Explain to them the concept of investment. Emphasize that money can grow if it is well managed and that investing involves making decisions and taking risks, which, if well analyzed, are worth it.

If you introduce children from a young age to different investment options, such as savings accounts, stocks, bonds, and explain the benefits of these, they will become familiar with them from an early age and it will be easier for them to invest when they have the opportunity.

Another way to 'nudge' them to invest is to encourage them to research companies or institutions that they like and in which they would like to put some of their money in exchange for receiving some benefit, for example, a sports club.

Let them make their own decisions, don't be afraid that they will make mistakes, let them make their own financial path, let them decide what they would like to invest in, or how much they will save from their allowance to buy what they want. Of course, accompaniment is always vital.


Keep in mind that in addition to the accompaniment, children learn by example, so make sure that what you reflect is what you are teaching, set savings goals for yourself and get down to work. Remember that if children are aware of the importance of managing money well from an early age, they will surely save more than one headache when they grow up and will have a healthier economy.

You can continue reading the article: Graphomotor exercises

Author: Kiddus Team

At Kiddus we take pride in creating high-quality accessories for kids that are both functional and fashionable. Our team is composed of professionals in the children's industry, including designers, engineers, and child development experts. We work together to create innovative and safe products that meet the needs of both children and parents. With years of experience and a passion for quality, we strive to exceed expectations and bring joy to families around the world.

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