Children learn about money from parents, nannies and friends. Our understanding of money begins at a young age and by the time we are adults, it’s second nature to use cash, credit and debit cards. In monetary societies, money is used to repay debts and provide payment for goods and services which can be a difficult concept for a child to grasp. Why does some paper have value and other paper is used to build crafts?

Here are six ways to teach children about the concept and use of money as they advance from preschool to high school.


  1. Preschool Children. Young children can learn about money as soon as they start counting and recognizing numbers. Coins can be made from cutting different sized circles out of construction paper. Bills can be made by cutting rectangles. The values can be clearly written using markers or pens. The concept of spending money can be demonstrated by playing store. Toys can be used as goods and homemade money can be exchanged for them. As the children get older, they can begin to combine the bills and coins to get the amount they need for a specific item.


  1. Early Elementary. Another way for children to learn to recognize the various coins is to have them sort the change from their piggy banks. Having penny, nickel, dime and quarter wrappers available can help them determine how much they have. The children can then take the rolled coins to a bank or credit union and get them changed to bills. This reinforces the concept of how coins and bills are related and how money aggregates.


  1. Board games using money are a great way for children to learn how to use money to purchase gameboard items and how to make change. Hasbro’s Monopoly and PayDay games are two that quickly come to mind, but there are many that can be used to teach and reinforce monetary concepts.


  1. Late Elementary. As children get older and learn to deal with the concept of percentages, they can apply this knowledge by helping to determine the amount of tip owed on a dining bill. The amount of the tip often varies between 15% and 25% depending on the type of restaurant and the quality of service. Asking children to estimate a specific percentage for tip shows them how their math concept of percentage can be applied in daily life.


  1. Middle School. The concept of saving is another lesson about money. A savings account may be opened in the child’s name or a reloadable, prepaid credit card may be used to help the child save money for a specific purpose. The concept of interest can be learned from a simple savings account. Children may start by saving for a specific item, and then should advance to the concept of savings for potential future needs and wants as well as specific items, but also potential future needs or wants.


  1. High School. Learning about accruing interest and paying taxes are important financial lessons. Teenagers should learn the long-term impact of purchasing an item on a credit card and making the minimum monthly payment.


Let’s say a teenager buys a new cell phone for $1000 using a new credit card without any other charges. The teenager pays the minimum payment of $30 required.  Wow – a $1000 phone for only $30 a month.  Sounds great – right?  Teach the teenager to look closer. If the card has an annual interest rate of 15%, that means the teenager will have to make over 43 payments of $30 each to pay off the balance – and that assumes you don’t charge anything else on this card. For the next 3 ½ years, the teenager owes the credit card company $30 a month. In the end, the teenager will have paid $1000 for the phone and $302 in interest to the credit card company. The $1000 phone really cost $1302.

As teenagers get their first job, they also learn about federal and state taxes. Explaining Social Security and Medicare (FICA) tax, federal income tax and state income tax will help teenagers understand why their hourly rate and hours worked don’t equal their take-home pay.


Monetary systems are abstract concepts and with banking done online, it can be challenging for children to understand important financial concepts. Using age-appropriate games and activities, children can learn about numbers, values, percentages, interest, and taxes. To learn more, a Financial Management course is available with enrollment in the Professional Childcare program at US Nanny