Financial literacy is a life skill that serves kids well into adulthood, giving them the tools to make sound money decisions. For dads, teaching finance to kids at every stage of their growth can empower them to handle everything from budgeting to investments in the future. Here’s a breakdown of how to approach financial education by age, ensuring your children are well-prepared for each new financial challenge.

Starting Young: Ages 3-7 – Understanding Money Basics

Early childhood is the perfect time to introduce the basics of money. Kids in this age group are naturally curious. Start with counting money—coins and bills—and introduce the idea of saving. Using a clear piggy bank or jars labeled “Save,” “Spend,” and “Share” can help children visually understand how money is allocated.

By incorporating play, such as pretend shopping or playing store, you can teach your child about prices, trade-offs, and the idea that once money is spent, it’s gone. This stage is about laying the groundwork, showing that money is a limited resource and must be handled with care.

Elementary School: Ages 8-12 – Budgeting and Saving

As children grow, you can begin to introduce budgeting and goal-setting. Give your child a small allowance. With an allowance, kids can also begin to experience saving for things they want and learning the value of patience and prioritization.

Another great exercise is to set a savings goal with your child. This can teach delayed gratification and budgeting skills as they set aside part of their allowance each week. Additionally, taking them to a bank to open a simple savings account can be a powerful experience.

Teen Years: Ages 13-18 – Building Responsibility with Income and Expenses

Teenagers are ready for more advanced financial concepts, especially as they begin to earn money from part-time jobs or receive monetary gifts for milestones. At this stage, focus on budgeting and managing expenses. Teach them about the “50/30/20 rule,” which designates 50% of income to needs, 30% to wants, and 20% to savings or debt. While the concept may be simple, it introduces the principles of balancing income with expenses and prioritizing financial goals.

Additionally, encourage teens to research big purchases or compare prices on items they want. This practice builds responsible spending habits. Many teens are also ready to learn about credit and the risks associated with debt. You could introduce credit card basics, explaining interest and how easily debt can build up without careful budgeting.

Young Adults: Ages 18+ – Preparing for Major Life Expenses

By the time kids turn 18, they are on the brink of adulthood and often face their first major financial responsibilities. At this point, teaching about taxes, long-term savings, and investments is essential. A smart introduction to credit, loans, and managing debt will serve young adults well.

If your adult child is starting a job, discuss the importance of contributing to retirement funds early on. Help them understand that investing early makes a difference. For young adults starting careers, working with a professional can help create a solid financial plan. Consulting retirement planners in Denver, CO, or in their local area can provide valuable insight into setting up retirement funds, insurance plans, and investment options.

By guiding your children through these stages, you help create a solid foundation of financial literacy that they can build upon as they grow. Teaching finance at every age isn’t just about handling money—it’s about building independence, responsibility, and confidence. With each new stage of understanding, kids become more capable of making sound financial choices that will benefit them throughout their lives. Check out the accompanying graphic for more information.