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a dad helping his son put money in a piggy bank

Childhood financial socialization is the process by which children learn about money. It shapes their attitudes, behaviors, and beliefs about money and finances. This socialization begins as young as age 4 and continues throughout a lifetime. Children observe their parents’ attitudes, feelings, and habits toward money. Since money is a part of our daily lives, there are ample opportunities to think about it “out loud” with kids.

Consider these four healthy ways to introduce children to money concepts like saving, budgeting, decision-making, and investing.     

Reinforce Math Skills in Practical Settings

The grocery store is a great place to practice math and money skills. While grocery shopping, include your children. Consider the benefits of talking through your grocery trip.

  • Explain the cost of items, or why you are choosing to purchase one brand over another
  • Explain purchase choices in simple terms helps children understand budgeting concepts
  • Practice addition and subtraction skills
  • Allow kids to keep track of the grocery budget while walking through the store 

Include them in the Conversation

In addition to teaching children about the concept of money, including them in conversations about both large and small purchases helps them feel included and heard. Include children in conversations about purchase decisions, particularly if any significant changes are on the horizon, such as:

  • Relocating to another house
  • Purchasing a car
  • Changing employment or job search
  • Planning an upcoming vacation
  • Deciding whether or not to get a family pet

Practice Creates Progress

The concept of money is somewhat abstract for most children. Handling money and having the opportunity to earn and spend it helps kids grasp its concept. Some common methods for giving an allowance are according to:

  • Age
  • School performance/grades
  • Participation in extra circular activities
  • Completion of household chores

Regardless of how your child earns their allowance, it is important to encourage healthy spending and saving habits for needs and wants.

Lead by Example

Children will pay more attention to what you do than to what you say. If they see you paying attention to money, making calculated decisions on money, and budgeting and saving, they are more likely to do the same.

Extension can help adults shore up financial skills and knowledge. The following are some ways you can learn more about financial skills:

  • Listen to the Alabama Money podcast
  • Read an article about credit, saving, and investing
  • Attend a WISE Money Workshop
  • Enroll in Money Smart for Adults


When it comes to money and teaching children, the sooner you start, the better. The more time children engage positively with money, the better they will feel about one day managing their own money.  For more information visit www.aces.edu.