To address the topic of money with children, it’s crucial to explain it clearly and directly, introducing concepts such as quantity, price, and value. Financially educating children is a valuable gift, empowering them to deal consciously and responsibly with financial matters.

Here are 10 tips on how to talk to children about money—a challenge for many parents and educators. However, teaching kids early on about the value of money and how to use it responsibly is essential.

1) Start early by explaining the use of money

Don’t wait until children are older to talk about money. Start the conversation as soon as they’re old enough to understand trade and choice.

• For children aged 2 to 5, introduce the concept of saving through a piggy bank, setting goals like saving for an ice cream.
• For children aged 6 to 8, teach the value of things by showing the prices of groceries and toys. Associate bills and coins with specific items (e.g., a R$2 bill equals a popsicle). Create playful scenarios, like a mini market at home, to teach about value.
• For children aged 9 to 12, use allowances as a tool to teach the value of money. Explain the difference between wants and needs, introducing allowances as a conscious way to manage money. Help them set financial priorities.

2) Use practical, real-life examples to teach about money

Leverage everyday situations, like grocery shopping, paying bills, or saving for a goal, to explain how money is earned, spent, and saved.

• At the supermarket, show product prices and explain how money is used to buy essentials, demonstrating family financial planning.
• Involve children in spending decisions during outings, like going to the movies or the park. Ask if they’d prefer an immediate treat or save for something bigger later.
• If they receive an allowance, use it to teach budgeting. Help them plan their spending, dividing it into savings, expenses, and donations.

3) Establish an allowance to teach money management

Adapted to the child’s age and maturity, set clear rules for how the money should be used. Teach them to divide the allowance into categories, such as savings for specific goals like buying a toy or going on a trip.

4) Encourage saving for the future

Saving is one of the most important lessons to teach children. Help them set short-, medium-, and long-term goals, showing them how to allocate part of their allowance or earnings to achieve these goals.

Set savings goals together, like buying a toy, taking a family trip, or even saving for college in the future. Celebrate when these goals are achieved, encouraging the habit of saving. Lead by example, showing your own saving and investment practices to inspire them.

5) Teach about conscious consumption

Show how excessive and impulsive consumption can impact the environment, society, and financial health.

• Explain the difference between basic needs and desires, helping children distinguish between essential and impulsive purchases.
• Teach them about consumer rights and responsibilities, and how to avoid fraud.
• Highlight the importance of reusing items whenever possible and recycling materials like paper, plastic, and glass, demonstrating how small actions make a difference.
• Be a model of conscious consumption, as children learn a lot by observing adults.

6) Open a dialogue about the values behind financial decisions

While discussing money, take the opportunity to highlight important family values like honesty, generosity, solidarity, and gratitude, and how these relate to money management.

• Teach the importance of honesty by showing how telling the truth, even in difficult situations, is essential.
• Promote the acceptance of differences and avoid judging others, showing how diversity enriches our society.
• Encourage gratitude for life’s blessings to foster a positive attitude toward money.

7) Be a positive financial role model

Children learn more from observing than just listening. Share your financial experiences, successes, and failures, demonstrating how you plan, control, and invest your money.

Show empathy and understanding for others’ feelings, regardless of their economic status. Treat everyone with kindness and respect for their opinions, cultures, and differences.

8) Use playful resources to make learning about money fun

Incorporate games, books, movies, and educational cartoons that present financial topics in an engaging way.

• Explore board games or apps that teach about money, where children can earn or lose money based on their choices.
• Set up a pretend store at home, allowing children to “buy” and “sell” items with fake money to learn about prices and change.
• Encourage creativity by asking children to draw or write about what they would do with a sum of money.
• Add songs or choreography about financial topics to make the learning process dynamic and enjoyable.

9) Teach the difference between needs and wants

Understanding this distinction is critical to children’s financial development.

• Needs are essential items for survival and well-being, like food, water, clothing, shelter, and healthcare.
• Wants are non-essential items, like toys, electronics, trendy clothes, and trips that bring pleasure but aren’t indispensable.

During everyday activities, emphasize this difference. For instance, at the supermarket, show that food is a need, while a toy is a want.

10) Highlight the importance of saving as a fundamental practice

• Financial security: Savings provide a safety net for unforeseen events, such as medical emergencies or job loss, offering peace of mind and stability.
• Goal achievement: Saving makes it possible to achieve goals like buying a car, traveling, taking courses, or purchasing a house, turning dreams into reality.
• Independence and freedom: Having your own savings means not relying solely on others, granting financial independence and autonomy.
• Future preparation: Saving is the first step toward future investments. Over time, savings can grow through smart investments.
• Avoiding debt: By saving, there’s less need to rely on loans or credit cards, reducing the risk of excessive debt.

It’s essential to convey to children the importance of preparing for the future and learning to save early, making this practice accessible and rewarding.