Peace at Home Blog

Raising Financially Savvy Kids

April 2025 | Ruth Freeman

Financial literacy for kids is more important than ever. With digital wallets, online shopping, and in-game purchases, children are making money decisions earlier—and often without fully understanding them. Teaching kids about money isn’t just about saving coins in a piggy bank anymore. It’s about preparing them for real-life choices in a digital world. By introducing money concepts early, children learn that money is not just for spending—it’s also for saving, giving, and planning for the future.

Studies show that kids develop money habits by age 7. That means even preschoolers can start learning basic concepts like:

• Identifying coins and bills
• Understanding needs vs. wants
• Learning that money is earned and spent

As kids grow, teach them about budgeting, saving, and long-term goals from buying a special video game or a new bicycle to paying for college or buying a car. By the teen years, ideally your child understands credit, compound interest, and even basics like IRAs. You might be surprised about how early kids can open Roth IRA’s.

Online Money Safety for Kids (and Adults!)

With apps and games offering “easy” purchases, it’s important for kids to understand online money is REAL money. Ideally we as parents understand online money SAFETY. Plan to talk with your child about:

• In-game currency (like Robux or V-Bucks) and its real-world cost
• The enormous risks of sharing personal or payment info
• Pausing before making any digital purchase

Consider setting up parental controls and encourage open conversations about digital spending. Check when you give your kids access to a game or an app that they don’t also have access to your credit card.

Use Allowance to Build Good Habits

A simple allowance system can teach kids how to manage money. You can start by creating a budget with your child and breaking their allowance down into spending, saving and sharing. Let your children make mistakes—they learn valuable lessons that way.

Be a Financial Role Model

Kids learn more from what you do than what you say. Reflect on your own financial habits. Are you demonstrating responsible money management? Are you teaching by example?

For many, money can be a source of anxiety and even shame. Talk openly about money decisions and your money challenges both in the past and today. Its ok to learn along with your child as you dig into financial literacy. When appropriate, include your child in simple financial discussions. 

Teaching kids about money is one of the most important life skills you can give them. Start early, keep it age-appropriate, and don’t skip the digital side of money. With a little effort, you’ll raise confident, financially savvy kids who are equipped to make smart money decisions.

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