Personal Finance 

5 top tips to get your kids money-smart.

New York Life | February 21, 2020

Updated December 14, 2023


Raising a family is a major financial responsibility, yet many parents struggle to help their kids be smart about how they earn, spend and save their money. Children develop attitudes toward money at a young age, so it’s important to build good behaviors as early as possible. And now is the time to teach kids good money habits, as they may have money from holiday gifts. So, here are five top tips to help kids be money-smart!

1. Set savings goals, give rewards

For kids of all ages, encourage them to save by setting goals. See if they can save their holiday bucks, or put away their spending money, for a month. When they smash that goal, reward them with a special treat or something else they wouldn’t normally get. According to best-selling author Gretchen Rubin, treats are good for you – who knew?! Rubin says that a positive reward system creates habit-forming behavior: when we treat ourselves, we feel energized, cared for, and content - which helps us maintain our healthy habits. Like healthy money habits.

2. Be the bank

“Hey mom, can you lend me a dollar?” Teaching kids about lending and interest could teach them when to use credit and how to use it responsibly. Play the role of creditor – the doors of the Bank of Mom and Dad are always open! – “Sure, borrow that dollar now, but you’ll need to pay me back later and with a little extra—that’s called interest.” Borrowing means you can get what you want right now, but it comes at a cost.

3. Give them a job

Kids love to play at doing work from an early age, and soon they’ll want real money for it. So give them a job! Depending on their age, how about some household chores, washing the car or taking the dog for a walk? Not only will they get their reward in dollars, but they’ll also feel a sense of worth and achievement. Show them how spending well-earned money feels so much better than spending borrowed money. Doing these jobs together (“Let’s clean up the yard - I'll mow the lawn, you sweep up the leaves.”) could be a great opportunity for some parent-child bonding.

4. Open an account

Opening a dedicated savings account for your kids is a great way to teach them about interest, how long it takes to save a specific amount of money, and long-term financial planning. Put in that holiday money and those bucks from doing the chores, and they can watch their money grow. It will also give them a sense of financial ownership, encouraging them to be financially independent.

5. Make investing fun

Not for real, of course! But get older kids interested in investing, with some fun thrown in, by playing an online virtual stock market game. Give them a play-money portfolio and track the results. Once they get the hang of the basics, let them build their own. You could play together, or against each other – they’d love to beat mom or dad at their own game. Kids learn so fast, they’ll soon be teaching you a trick or two. Next stop, Wall Street!


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Media contact

Kevin Maher
New York Life Insurance Company
(212) 576-7937