The Art of Talking Money with Your Child 

 

 As parents, we’re our children’s very first teachers. Long before they step into a classroom, they’re already learning from us, watching how we spend, save, earn, and give. Every grocery run, every family discussion, even every small “no” or “not today” becomes a teachable moment. 

That’s why talking to kids about money isn’t just important, it’s powerful. Early, simple conversations can shape how confident, responsible, and mindful they become with money as adults. Children who grow up openly discussing money often carry stronger financial skills and healthier money habits throughout life. 

 Let us discuss a few ways through which we can impart this knowledge to our children. 

 

Piggy Bank

Most of us grew up with a piggy bank, that little jar, tin box, or ceramic pig that quietly taught us the value of saving. It’s one of the simplest yet most powerful ways to introduce children to money management. Encourage your child to regularly set aside a portion of their allowance and drop it into their piggy bank. 

In Indian households, children also receive money during festivals, as shagun, or on birthdays, from relatives. Guide them to save a part of this, too. Watching their savings grow coin by coin, note by note, gives them a sense of achievement and builds the habit of saving naturally. 

Talk to them about why saving matters and how every rupee saved today can help them buy something meaningful tomorrow. Over time, this small practice lays the foundation for responsible financial behaviour. 

 

Earning can be fun  

The important lesson that you can teach your children is that earning something makes you feel good. The feeling of accomplishment that comes with earning for your hard work is rewarding. Have your children help you and your spouse in activities that are outside of the routine and reward them for a job well done. Children like to be appreciated, and they are always looking at us for validation.  

  

Not all work equals to money – 

 

Routine/regular work/chores that your children are supposed to do, like helping clean up after dinner, organising their room, helping with laundry or cleaning dishes, should not be rewarded. They should understand that these chores are done as part of the family and inculcate in them some disciplines and principles of life that it is a shared responsibility. 

They should also learn that not every effort or action can be measured in money; many things in life are intangible, value-based, and done simply because they are the right thing to do. 

 

• Teach your child about value buying

We should teach our children how to spend money judiciously. This relates to an important aspect of spending, which is value buying. While teaching your kid about money, you should discuss his/her spending choices. You must discuss where and on what they should be spending money. You should introduce to them the idea of buying necessary things rather than spending all their pocket money on something that is not required.  

This could be well explained to your kid if you give them choices while buying things for them. For instance, if your kid demands a toy and a book, don't easily give in to both demands. Tell them that with their pocket money, or rather with their budget, they can buy only one of the two. At the same time, help them with their decision to select the best option. Encourage them to think of events that may come where they may need money for like a birthday, festivals or a toy. This will teach the concept of budgeting. 

 

• Money actions  

Involve them in small activities like grocery shopping, buying a present or books. Teach them to look at the price, manufactured and expiry dates,  compare the price of similar products, and to make a sensible thoughtful decision to buy a cheaper/ better quality product or service that is on sale, how everything expensive does not have to be the best, how money is exchanged all these are practical lessons that can go a long way in moulding their financial literacy. 

 

• Savings  

Teach them to respect money and the value of things that they possess. The hard work and effort that goes in by the parents in earning that sum and buying it for them in their younger years. As they grow up, they should develop and compartmentalise whatever they earn to be split into savings and spending (and charity if you want). Without exception, the money that goes into the savings jar should not be disturbed. You can also teach them about saving for an emergency. They may be too young to understand, but this way they will develop a discipline of saving first and spending later. 

 

• Through Games  

– There are many games that involve money, like Monopoly or Career,s which allow children to plan, trade and manage fake money. There are digital games that are similar to board games. This is a fun way of teaching them about earning, saving and spending. 

 

• Talk about investing: 

Finally, savings should eventually lead to investing. As the kids grow, you should introduce them to the concept of investing their savings and highlight the idea of how the money could grow through investments. The first step in this direction would be to encourage them to open a savings account and help them see and track their money growth. The money saved and the interest earned on it could come in handy in the long run to meet their financial requirements.

 

• Be a role model –  

Practice what you preach! It is no good if you don’t follow what you are preaching. This will only help if you walk the talk. You don’t want to get into a situation where your children point out that you are not following your own rules! 

Introducing money talk at a young age can inculcate the good habit of saving, and it will become second nature to them. This is a life lesson that you can give as a valuable gift to your children to become financially savvy adults. 

Teaching children about money goes far beyond coins and notes; it’s about shaping mindsets, building discipline, and preparing them to make thoughtful choices. When parents bring money conversations into everyday life, children develop confidence and a healthy understanding of how money works. By encouraging saving, responsible spending, and value-based choices, we equip our children with practical life skills that go far beyond finances. 

Above all, children learn best by watching our actions, our choices, and our relationship with money. Starting early and staying consistent can help children grow into thoughtful, financially independent, and responsible adults. 

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