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Parents / Children, Personal Finance

How to teach children about money

teach children about money

How do you give a child a sense of what money means? Children learn by observing and trying out. When teaching people how to handle money responsibly, it is important to give children room early on to practice, make mistakes and celebrate success. Our guide outlines how to teach children about money.

Handling your own money makes children aware of the value of money. They see that money is not an infinite resource and learn how to divide up their money, set priorities and work towards savings goals. This is how children experience self-determination and a sense of responsibility.

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Use pocket money to teach children about money

There are a few basics to consider when introducing pocket money to teach children about money: When a child starts school, they are generally old enough to receive pocket money for the first time. This should be paid regularly, without being asked, and unconditionally. It is important that children are allowed to spend their pocket money for what they want. This also includes bad purchases. Then thinking about them together helps to learn from mistakes.

The amount of the pocket money and the payment frequency depend on the age – experts recommend starting at 6 years and about $5 per week. From 10 years of age, the pocket money can also be paid monthly, so that children learn to allocate their money over the long term and work towards larger goals.

In order to consciously teach children about money, it makes sense to proactively discuss relevant topics in the family: Where does our money come from? How long do you have to work for the pocket money? What do we need money for? Who considers which expenditure makes sense and why? These considerations support a reflective use of money as a resource.

From pleasure expenses to living expenses

The pocket money is a first step in an independent money life. It is also important to convey an understanding of future living costs. Open discussions about the costs of maintaining a family are a first starting point here.

Another way to give a child aged 12 and over a solid insight into the general cost of living is the youth wage. This is a fixed monthly amount with which, in addition to personal enjoyment, agreed living costs (e.g. clothes, bike repairs, cell phones, hobbies) must be covered. In this way, children and adolescents are gradually transferred skills in real life and at the same time encouraged personal responsibility and independence. You will learn how to plan for the long term and how to weigh consumer wishes against necessary purchases.

Ämtli and vacation jobs enrich the first steps into an independent money life with the factor work. This creates an awareness that you have to work for money (mostly) and young people also learn to better assess the relationship between work and living costs.

In summary, by using their own money, children and adolescents acquire the ability to set priorities and make conscious consumer decisions based on them, they learn to divide up their money and receive a realistic assessment of the cost of living – all of them basic skills to be able to use their own later Handle income responsibly.

All costs at a glance

How do your children get a feel for what costs are incurred in life? Start a family challenge! Each family member records all expenses for a week. At the end of the week, the lists are then compared:

  • What is the most money spent on?
  • What are the differences between children and parents?
  • What are the living costs for a family (bills, food, etc.)?