How to teach your children about money

A child holding his piggy bank. When the piggy bank is eventually opened, you can share your achievement of the financial goal set. Photo/FILE

What you need to know:

  • Children need practical ways to practice abstract ideas.
  • Having a piggy bank for kids at an early age is not only helpful in getting kids confident on matters, it also helps parents to be able to start conversations on money.

“Money does not grow on trees” is familiar saying in many Kenyan homes.

Perhaps it was our parents’ attempt to teach us about money. Whether or not they were successful is a story for another day. Experts however agree that children need to learn about money as early as possible.

“Children as early as three can already grasp important concepts on money. This is an ideal age to start the children on the financial literacy path,” advises Elizabeth Waithaka Ndegwa, a financial literary coach, founder of Attique Africa, a Finance Literacy and Investments advisory company in Nairobi.


According to the mother of four, brain development is at its peak in these early years, and the money lessons learnt can be long life.

Additionally, teaching children about money helps them in developing good character traits.

“Children develop key traits such as patience, faithfulness, accountability, truthfulness and creativity. They also learn about the importance of responsibility.

This prepares them to become financially responsible citizens who will build strong families, neighbourhoods as well as local and international communities,” she adds.

The coach, who also runs a financial empowerment program for children aged five and above, emphasises the importance of engaging children in activities and discussions around money.

Make it fun and highly interactive.” she advices.

“Start by teaching them what money is and where it comes from. The most important lessons parents need to teach their kids is the relationship between money and work. Money does not just come from mum’s or dad’s pockets. They earned it from somewhere. As such, it should be spent wisely,” she says.

“You can also teach them about different currencies and later, introduce lessons such as the difference between needs and wants, comparison shopping, saving and growing money,” Elizabeth adds.


Children need practical ways to practice abstract ideas. Having a piggy bank for kids at an early age is not only helpful in getting kids confident on matters, it also helps parents to be able to start conversations on money.

“Savings are a powerful money management secret and the security of your savings is a factor that should be put into consideration. Money in a piggy bank may not be completely secure. However, it’s good idea to cultivate the habit of saving. Of course there should be a plan to secure the savings every so often,” she notes.


Just as we learnt our first lessons on money from our parents and communities, our children also learn from us first.

“Our financial blue prints are entrenched in us from an early age through watching people’s interactions with money. For example, children will notice when parents argue about money, they will notice when you give or ask for change. As parents, we should aim to set good examples to our children, mainly through our interactions with money.” states Elizabeth.


“Financial literary gets children to understand the value of things. They also learnt that the best things in life are free. For example, they need to understand that no matter how much money they have they cannot buy sleep, laughter or love.”


Teaching children opportunity cost allows them to understand that they need to always weigh their decisions carefully before a purchase.

“Children should learn to weigh the cost of the foregone alternative. If they buy this item, they’ll miss out on another, and they need to accept it. This helps in developing patience and the character of moderation,” explains the coach.


In teaching children about money, parents can give them commissions based on the chores they did, be it at home or even while at that visit to your office.

“By giving commission, we cultivate a character of discipline and hard work in children. This also helps in emphasizing the concept that money is earned and not just given,” she says.


It is important to teach children the importance of a budget.  “We should discourage children from making impulse buys. Getting something on a different day may help them see that they do not really need it after all,” says the coach.

 “Children’s financial literacy is a core life skill and especially in this complex modern world that our children are growing up in.

Whether children come from low-income backgrounds or more privileged ones, learning basic concepts of personal finance like saving, sharing and spending is essential for growth and child development.

The early years of life are the best time to start,” concludes Elizabeth.