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Money Matters: How to Explain to Kids Why Learning Personal Finance is Important

Part of our "How do We Use It..." series. *A list of children's books and games about money may be found at the end of the blog post.

As parents and educators, one of our crucial responsibilities is preparing the next generation for the realities of the world. One often overlooked but vital aspect of this preparation is teaching kids about personal finance. In a society where financial decisions significantly impact our lives, imparting these skills to children early on is an investment in their future success and well-being. In this blog post, we'll explore effective ways to explain to kids why learning personal finance is important.

  1. Relatable Analogies:

Start by using relatable analogies that resonate with children. Explain personal finance concepts in terms they can understand. For example, compare budgeting to planning for a big family vacation. Just as you need to allocate money for transportation, accommodation, and activities, a budget helps allocate funds for various expenses in daily life.

Example Situation: "Think of your allowance as your budget for the week. Just like we plan for a vacation by deciding how much to spend on each activity, your allowance helps you decide how much to spend on toys, snacks, and other things you want during the week."

  1. Empowerment Through Knowledge:

Highlight the idea that learning about personal finance empowers them to make choices and control their money rather than the other way around. Discuss the freedom and independence that come with financial knowledge, emphasizing that understanding money matters allows them to shape their own financial future.

Example Situation: "Imagine having your own piggy bank. By learning how to save and manage your money, you can decide when to buy something special or save for an even bigger goal. It's like having your own superpower over money!"

  1. The Importance of Saving:

Introduce the concept of saving money as a way to achieve their goals. Whether it's a toy they've been eyeing or a future adventure, explain that saving is like planting seeds for the future. It allows them to enjoy the fruits of their labor later on and teaches delayed gratification, a valuable life skill.

Example Situation: "Remember that toy you really want? Instead of spending all your money right away, saving a little each week brings you closer to getting it. It's like planting a seed – the more you save, the more your 'money plant' grows!"

  1. Real-World Application:

Children often learn best through hands-on experiences. Involve them in real-world financial activities, such as grocery shopping or creating a lemonade stand. Show them how money is earned, spent, and saved in these practical situations. These experiences make abstract financial concepts more tangible and relatable.

Example Situation: "Let's create a mini-store at home! You can use your play money to 'buy' items from the store, just like we do when we go shopping. It's a fun way to learn about spending wisely and even saving some play money for later!"

  1. Stories and Games:

Utilize stories or games that incorporate financial lessons. There are numerous books and board games designed to teach kids about money in a fun and engaging way. By turning learning into an enjoyable experience, children are more likely to retain important concepts and develop positive attitudes toward personal finance.

Example Situation: "How about we read a story about a character who learns about money, just like you are? It's like going on an adventure together, and we can talk about what the character learns at the end!"

  1. Setting Financial Goals:

Guide kids in setting their financial goals, no matter how small. It could be saving for a favorite toy, contributing to a charity, or even setting aside money for a rainy day. By having clear objectives, children learn the value of planning and see the direct connection between their actions and financial outcomes.

Example Situation: "Let's think about something special you want, like a new game. We can set a goal together – if you save a little bit each week, you'll have enough money to buy it in a month. It's like having your own mission to accomplish!"

  1. Emphasizing Responsibility:

Teach children that with financial knowledge comes responsibility. Discuss the consequences of financial choices and the importance of making thoughtful decisions. Emphasize that financial responsibility is not just about managing money but also about contributing positively to the community and helping those in need.

Example Situation: "Imagine you have extra toys you don't play with anymore. We can donate them to kids who don't have as many toys. It's a way of using our money and resources to help others, showing responsibility and kindness at the same time."

Explaining to kids why learning personal finance is important involves making the subject relatable, empowering them with knowledge, and emphasizing real-world applications. By framing financial education as a tool for achieving goals, fostering independence, and making responsible choices, we lay the foundation for a financially savvy and confident generation. Remember, the lessons they learn about money today will shape their financial attitudes and behaviors for years to come.


Here's a list of children's books that are engaging and educational, teaching kids valuable lessons about money, saving, and financial responsibility:

"The Berenstain Bears' Trouble with Money" by Stan and Jan Berenstain:

  • Join the beloved Berenstain Bears as they navigate the world of earning, saving, and spending money in this classic tale

  • Follow Alexander's misadventures as he learns about the consequences of spending his money impulsively and discovers the importance of saving.

"A Chair for My Mother" by Vera B. Williams:

  • This heartwarming story illustrates the power of saving and working together as a family to achieve a common goal - in this case, buying a comfortable chair.

"The Coin Counting Book" by Rozanne Lanczak Williams:

  • A delightful and educational book that introduces young readers to the world of coins and counting while making it an enjoyable learning experience.

"Bunny Money" by Rosemary Wells:

  • Max and Ruby set out to buy Grandma a birthday gift, and young readers learn about budgeting, decision-making, and dealing with unexpected expenses along the way.

"Curious George Saves His Pennies" by H.A. Rey and Margret Rey:

  • Everyone's favorite monkey, Curious George, learns about saving, spending, and the joy of achieving a goal in this charming tale.

  • Follow siblings Pauline and John-John as they embark on a winter adventure selling lemonade, exploring the basics of entrepreneurship and money management.

  • Part of the Cat in the Hat's Learning Library series, this book offers a fun and informative introduction to the history and various forms of money.

  • This story about two brothers highlights the concept of saving money and the impact of making thoughtful financial choices.

"Piggy Bank Problems" by Fran Manushkin:

  • Join Katie as she learns about money and the importance of saving for both short-term and long-term goals in this engaging and relatable story.


Board games can be a fantastic and interactive way to teach kids about money management, decision-making, and basic financial concepts. Here's a list of board games that are both educational and entertaining:

  • A classic game that introduces kids to the world of buying, selling, and trading properties. It teaches concepts like budgeting, negotiation, and the value of strategic decision-making.

  • In this simplified version of The Game of Life, kids make decisions about education, careers, and money as they journey through life's adventures. It's a great introduction to financial choices.

  • This game involves counting, adding, and exchanging money, helping children develop basic math skills while learning about the value of different coins.

  • Pay Day simulates a month of financial responsibility, where players manage their money, pay bills, and navigate unexpected expenses. It's a fun way to teach budgeting and financial planning.

  • BankIt! is a money board game that provides a hands-on learning experience by teaching players how to manage money, make wise financial decisions, and budget effectively.

  • Moneywise Kids is designed to teach children about earning, spending, and saving money. Players earn income through various jobs, make spending decisions, and learn about budgeting.

  • This game combines the fun of shopping with practical money skills. Players practice making purchasing decisions, calculating change, and staying within a budget.

  • The Allowance Game helps children learn about money management by earning, saving, and spending their allowances. It also introduces the concept of unexpected expenses.

  • Created by Robert Kiyosaki, author of "Rich Dad Poor Dad," Cashflow for Kids teaches financial principles through a game where players aim to build wealth and escape the rat race.

  • Teach children to count money with a fun game the entire family can enjoy! Parents will enjoy this game as much as their children.


Are you looking for an engaging Personal Finance curriculum for your older student?

Our Personal Finance course includes:

  • Engaging lessons with text and videos

  • True-to-life budget game

  • Investing game with real-time stock quotes

  • Optional LIVE lab class with a FunCation teacher

  • Skills: Budgeting, Investing, Credit Cards and Debt, Employment and Income, Financial Risks and Insurance

Personal Finance is just one of many courses available in our FAFlex program.

Contact Us for more information!

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