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Bottom Line Up Front

  • Teaching children money management skills will help them develop ideas about money that will set them on the road to success from a young age.
  • Practicing good spending habits early, like responsibly using a prepaid debit card, will prepare your child for a successful financial future.

Time to Read

3 minutes

May 23, 2022

If you want to empower your kids to make smart financial decisions throughout their lives, it pays to start teaching them money lessons from an early age. 

While you wouldn’t try to explain responsible credit use or how compound interest works to an elementary school child, you can teach even young children about money in age-appropriate ways. Here are some ideas to teach your kids how to master money.

Preschool Children (Ages 3-5)

Learning to wait. One of the first lessons children should learn is how to wait for something they want. Whether they’re waiting their turn on the slide or saving for something special, it’s important they learn self-control. 


Let kids pick something inexpensive they’d enjoy and let them pay for it. (Stick to low-cost items so they can save quickly enough that they don’t become frustrated.) Encourage them to put a portion of their allowance or gifts in a clear container. Count the savings together frequently and let them know how close they are to their goal. Then celebrate by making the purchase together.

School-Age Children (Ages 6-12)

Making choices. At this stage, kids can understand resources are finite—including money. So, it’s important to reinforce smart spending choices. One of the best lessons at this age is evaluating alternatives. Is there a lower-cost or no-cost alternative? When does it make sense to choose a pricier option? It’s about understanding affordability.


On your next shopping trip, involve your child in the decisions. Set a limit on how much you have to spend and use a calculator to estimate what you’re spending. Explain the choices. It doesn’t matter whether you choose items that are cheaper or higher-quality items that cost more–kids should understand the thought process. 

Afterward, review your receipt together. Note how purchases added up and focus on where you were able to save money. 

Teenagers (Ages 13-18)

Using credit responsibly. By this age, kids will enter the real world soon—which means they may have credit offers pouring in. During high school, get your child a prepaid card to encourage responsible spending. Stress that the 3 most important questions to ask themselves are:

  • “Is this a need or a want?” 
  • “If it’s a need, do I really need this?” 
  • “If I do need this, do I need this today or could it wait?”


Load a prepaid debit card for your older kid, such as Navy Federal’s GO Prepaid Card, and explain how much is available, how it can be used and how to track spending. Once they reach the limit, discuss their choices. It’s okay to have fun, but if they blew through it in a hurry, set expectations to encourage smarter use. If the choices were good, consider reloading the card for a higher amount. 

Next, have your child “pay” for their purchases at the end of a month by using allowance or money they’ve earned to reload the card for the amount they spent. They’ll start learning about paying back credit. 

Want to teach kids how to save for the future? Navy Federal Credit Union offers a number of options that make getting them started simple. Visit our Youth Finance page for more information.

Key Takeaways Key Takeaways


This content is intended to provide general information and shouldn't be considered legal, tax or financial advice. It's always a good idea to consult a tax or financial advisor for specific information on how certain laws apply to your situation and about your individual financial situation.