Teaching Kids About Financial Health: Best Books and Tips for Parents
Teaching Kids About Financial Health: Best Books and Tips for Parents
By Joanne McLain
Parents often ask us how to teach their children about financial health, usually hoping to help them avoid “the same mistakes [they] made.” Many assume these lessons should begin in school or adolescence, but the truth is you can start as early as three years old. Teaching financial concepts to children at these early stages lays the foundation for skills essential to building financial health as adults.
Why Start Teaching Financial Health at Age Three?
Every child grows at their own pace, both physically and cognitively. By the age of three, most children are starting to understand language, symbols and imagination—key tools for building financial literacy. This is the perfect time to introduce conversations about money and all of the other resources that contribute to financial health. (Learn more about what children should know to “lead financially smart lives” at various ages here.)
Children learn best through social interactions with people they trust. They observe, practice, reflect, imitate, play, and engage in conversations that shape their understanding of the world—including money. Children learn about finances and personal economics the same way they learn about everything else. Any direct instruction about financial matters becomes far more effective when integrated with these natural learning methods.
The Power of Reading to Teach Financial Concepts
One of the best ways to teach financial literacy is by reading with your child. Books naturally present “teachable moments” about finances, spending choices, and resource management. Many libraries offer free books and helpful tips on how to read with your children, too.
For children ages three to seven, consider the following books:
The Berenstain Bears’ Trouble with Money by Stan & Jan Berenstain
Brother and Sister Bear start as spendthrifts but quickly learn the value of earning and saving. They get so good at earning that their father gets concerned that “they’ve gone from caring too little about money to caring too much!” But in the end, they demonstrate generosity and use their money to enjoy a family activity together.
Any Berenstain Bears books will be ripe for this approach, but if you want to try one that addresses the subject directly, try Trouble with Money. This book illustrates various approaches to interacting with money, but it also shows how your other assets (including your environment, family and neighbors) can support you as you grow your financial health. You can also watch an animated video of the book here.Bunny Money by Rosemary Wells
Ruby and Max embark on a shopping trip to buy their grandmother a birthday gift. Ruby carefully considers their spending, while Max makes impulsive choices—yet in the end, their grandmother is delighted with their final selections.
Rosemary Wells shows how these two kids make spending decisions (some good, some maybe not so good). While reading this book, you can ask your child what they think about each spending choice the bunnies make. This book encourages discussions about decision-making and the consequences of spending choices.A Chair for My Mother by Vera B. Williams
After losing their home in a fire, Rosa, her mother, and her grandmother start to save a jar of coins to buy a big, comfortable chair. The neighborhood comes together to help them get set back up with everything they need, and the three of them work together to buy something that will bring them all comfort.
This is one of my favorite books for helping young children learn about financial health. It is a beautifully written and illustrated book that shows a loving family recovering from a traumatic experience (without talking directly about the trauma). Through their own efforts, as well as the support of extended family and neighbors, the three of them reclaim their home—a touching story that highlights financial planning, saving, and the power of community support.
Tips for Teaching Financial Literacy Through Reading
Want to make the most of these books? Here are some tips to enhance your child’s learning experience:
Keep it fun: Remember, the main goal is to enjoy reading together. Learning will happen naturally.
Choose age-appropriate books: Select books with relatable characters and simple explanations of financial concepts. Many books that aren’t directly about money still teach valuable financial lessons: any story about people making choices that affect their personal (economic) situation will work fine. And make sure the books are appropriate for your child’s age and comprehension level (ask a librarian if you have questions).
Make it interactive: While reading together, ask engaging questions like, “Why do you think the character wants to save money?” or “Which one would you choose?” or “What do you think will happen next?”
Relate the book to real life: Connect the concepts in the books to real-life situations. For example, when you go shopping, ask your child what a book character might choose to buy (or not buy), or involve them in small purchasing decisions.
Reinforce key concepts: Repeat ideas over time by re-reading books and connecting lessons between different stories. Be patient and understand that these concepts might take time to sink in.
We’d love to hear about your favorite books and tips for teaching kids financial literacy. Share your experiences in the comments below!
