Financial Literacy for Kids & Teens: Saving, Investing, Budgeting & Beyond

"Money doesn’t grow on trees." That’s what many parents say to their kids when the subject of a new toy or their own smartphone comes up. Sooner or later, every kid should learn where money does come from and how to manage it. Financial literacy is one of the most important skills a young person can learn, and fewer than half of American schools carry requirements for it.

Fortunately, the Internet has vast resources available for teaching kids and teens about how to save, budget, and even invest their money. Through a wealth of tutorials, games, and tips, you could soon be on your way to a fat savings account… or even teen entrepreneurship!

Saving

When should kids start learning about saving money? The experts say, the sooner the better. A child in kindergarten can learn that you need money to buy things, people earn money by working for it, and money must be saved to buy more expensive things.

A child who must buy things with their own money might quickly learn the difference between "want" and "need." As early as sixth grade, a kid can learn about putting savings in the bank, compound interest, and making their money grow (rather than blowing it on frivolous purchases). Teaching kids about saving their money will pay huge dividends when kids become teenagers and it’s time to save money for college. Teenagers in particular are targets for opportunistic credit card companies, and need to know that credit cards are not free money.

Budgeting

Young children have little need for budgeting their own money, but teaching them how to plan finances becomes more important as they grow older. Learning to budget at a young age can help avoid financial pitfalls later in life and give kids and teens the tools they need to prosper. Parents can include their kids in planning the family budget as a fun bonding activity. Financial planning becomes a critical life skill when teenagers get their first credit cards and leave for college. Some financial education might prevent panicked late-night calls to parents because they’re out of cash.

Investing

At first glance, investing might seem like an advanced topic for kids to learn - but you might be surprised. Once a child gets beyond the basics of the piggy bank and savings account, it’s not a drastic leap to stocks and bonds. Learning about investing teaches kids and teens about risk and reward, tracking investments, and how the market works. Planning investments is a family activity that can pay off figurative and literal dividends down the road!

Consumer Education and Financial Learning

Learning to become responsible consumers can be an important part of a child’s financial literacy. Comparison shopping, making smart consumer choices, and careful consideration of major purchases don’t always come naturally. These are learned behaviors that work best when a child or teen is armed with information. As teens approach adulthood, issues like car and personal insurance, paying premiums, and preparing for the future become more important. These resources will help kids and teens make informed choices and get the most out of the money they’ve worked so hard to earn, save, and invest.

Entrepreneurship

Beyond the basics of saving, budgeting and investing lies the ultimate in financial education for young people: running their own business. With the right training and resources, kids can move far beyond the corner lemonade stand or cookie-selling venture. Fostering an early interest in entrepreneurship can forge a powerful career path that leads to confidence, creativity and financial independence.