Financial literacy for kids

What is financial literacy?

Financial literacy is knowing how money works, how to manage it, and what to do when things go wrong. And just like any other skill, managing money well is something we have to learn. Unfortunately, financial literacy isn’t taught in most elementary and high schools, but that doesn’t mean it’s not important—it just means it’s something they need to learn at home. 

Why it's important to teach your kids about money

Teaching your kids about money when they’re young helps to set them up to be able to manage their finances when they grow up. Reasons to start young may include:

• Linking your family values to your kids’ attitudes about money
• Making it feel normal to have conversations about money
• Giving opportunities to learn from your mistakes
• Helping to form good habits starting at a young age

When to teach your kids about money

No matter how old your kids are, they’re the right age to learn about money—learning just needs to be age appropriate. For younger kids, start with simple money concepts like coins and dollars and price tags. For older kids, you can build on their knowledge with more complex concepts like credit cards. That way, by the time they get their first job or leave for college, they’ll have an understanding of the basics and how to deal with some of the financial matters they may encounter. 

Of course, every child is different, so get a feel for your kids’ understanding and interests, then find practical and creative ways to share the value of money, the importance of budgeting, and hazards of social pressure. 

The value of money 

When your kids watch you tap your card at the grocery store, they’re not exactly getting the full story. No matter the age of your children, it’s important for them to know the true value of money.

Budgeting—the 3 jars

To start budgeting with your kids, give them three jars (or three no-fee bank accounts for older kids)—one for saving, one for spending, and one for sharing. Decide with your children how much of their money will go into each. 

Social pressure

Social pressure is an important, and often overlooked, part of financial literacy for kids. It comes not only from the other children in their lives, but from the personalities they follow on shows, videos, and social media.

Help your kids see that sometimes what they want, or think they need, might be affected by seeing what other people have or by what other people tell them they need. Let them know that they need to decide what they want and need on their own and that they should ignore the social pressure. Just because someone else has something, doesn’t mean that everyone should have it. 

How to teach your kids about money

Like a lot of things, getting your kids interested isn’t only about what you say, it’s also about how you say it.

• Start slowly, make it fun, and keep it consistent. 
• Be open about your mistakes and your worries, and show them that it’s okay to talk about it.
• Use words they’ll understand and examples they can identify with.
• Set and save for some goals as a family, working together to make them happen.  
• Team up to find answers to questions you can’t answer, changing your own habits to show the value of what you learn.

Yearly check-in during financial literacy month

Each April is Financial Literacy Month. Take it as your cue to start—or continue—the conversation with your children. Take a little time for yourself, too, to brush up on your own financial skills and best next steps. 

And remember: You’re the example your kids will look to. It doesn’t mean you have to be perfect, but it does mean you have to be willing to listen, willing to learn, and open about what you know.

Visit our financial literacy for kids web page for more ideas and resources on how you can help your kids learn about finances.

_{1 In December 2022, John Hancock commissioned our ninth annual stress, finances, and well-being survey with the respected research firm Edelman Public Relations Worldwide Canada (Edelman) . An online survey of 3,825 workers was conducted between 11/29/22 and 12/14/22 to learn more about individual stress levels, their causes and effects, and strategies for relief. John Hancock and Edelman are not affiliated, and neither is responsible for the liabilities of the other.}