Hands holding coins

The 4 “S”‘s of Teaching Kids about Money Management

So whether you allocate a set weekly allowance, pay your child for doing all her chores, or just pay your child for doing the extra duties that go above and beyond the basic daily chores, if you want to teach your child about money management, she’ll need to have some of her own money to manage.

Once you figure out how you’re going to get some money into your child’s hand, use the 4 S system to help teach your child about money management.


Encourage your child to save 20% of all of her income. Your child may wish to save for a toy she’s been dreaming of or a trip to somewhere she’s been dying to go. You may wish to further break her savings down into short term (for a toy) and long term (for college) savings. Introducing your child to the concept of saving from a young age will help to establish this healthy financial habit early on.


Encourage your child to give back to her community and to help those in need by having her set aside 20% of all of her income to share. Help your child investigate charities that match up with her interests so she can feel a real connection to those she’s supporting. If you attend church, you may wish to have her set aside a certain percent to tithe.


We all pay taxes, so your child should get used to having a percentage of her money taken off the top from the get go. Set aside 10% for taxes and explain to your child that you use these funds to help pay for your child’s essentials, like food to eat and gas to get her where she needs to go.


Allow your child to spend 50% of all of her income however she’d like. Allowing your child to choose how to spend her money will allow her to experience the benefits of good spending choices and the consequences of bad ones.

Regardless of what system you use to teach your child about money management, there is no replacement for a healthy financial role model. Manage wisely, your children are watching!


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