Teaching Kids About Money, One Candy Aisle at a Time
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Do you teach your kids about money?
I have a habit of taking part of my kids’ allowance and adding it to their savings.
When I do this, I notice others look and say, “That is not right; let that girl spend her money”.
One evening, my family went grocery shopping, and I made my daughter pay for her own candy. The cashier responded, “My parents would have never allowed me to pay for my own candy”. I responded, “I am teaching her how to be responsible with her money”.
Now, I don’t make them pay for things like household necessity items, food, high-cost toys, and educational items. I DO make them pay for candy, junk food (which they rarely buy), and small trinket toys (they only play with them once).
Here’s what I noticed: my daughter hardly likes to spend her money. I have taken her to the largest toy stores with huge selections, and she usually leaves without anything. When I ask why, her response is, “I just don’t need any of it”.
We have been a minimalist family since she was born. Not buying much, only buying what we need.
So, is her habit of holding on to money taught, or am I teaching her that money is scarce and she should never spend it?
Growing up, I didn’t have much money. Actually, now that I think back on it, I also held on to money as if I would never obtain more.
And now that we’ve been laid off 3 times in 3 years, my tween is starting to recognize
I want my kids to know that money is a tool that can provide stability and prepare them for emergencies.
I don’t want them to think that they have to spend every dollar they receive, but I also want them to spend responsibly when they want to enjoy life.
My goal is not to raise kids who never spend money but to raise children who understand why they spend it.
How To Make Kids Understand Needs & Wants
At a young age, kids want what they want. They have no concept of what an item or experience costs or why they can’t have it. I’ve learned this by watching my toddler shop vs. my tween.
My toddler will toss multiple items in the cart, and later, I have to quietly remove them. I can always say no, but you know, meltdowns. I don’t fight battles that don’t need to be fought. 🙂
My sweet tween looks at the package, determines if it’s worth the money, and either moves on or goes for only one thing.
When discussing the needs, I have them think about: What keeps us safe, what keeps us healthy, and what keeps us able to live.
Two effective ways to teach what is needed:
- Use the “What happens if we do not have it?” question.
Teach them to ask, “What would happen if I did not have this?” If the answer is something like, “I would be unsafe, hungry, cold, unhealthy, or unable to do school,” it is probably a need. If the answer is, “I would be bored, sad, or disappointed,” it is probably a want. - Create real-life categories at home.
Have them help sort things around the house into groups: food, shelter, clothing, health, education, and fun. For example, toothpaste goes under health, shoes that fit go under clothing, books for school go under education, and candy goes under fun. This helps them see that needs are connected to everyday life, not just money.
Wants can bring joy, create memories, and give us something exciting to save for. I want them to understand that wanting something does not always mean we need to buy it immediately.
Two effective ways to teach what a want is:
- Use a wish list instead of buying right away.
When your child wants something, have them add it to a wish list instead of purchasing it immediately. After a few days or weeks, go back and ask, “Do you still want this?” This teaches them that some wants are real, and some are just in-the-moment excitement. - Let them use their own money for extras.
For things like candy, small toys, games, or trendy items, let them decide if it is worth spending their own money. This helps them understand that wants are not bad, but they do come with a choice: “Do I want this enough to spend my money on it?”
I’ve tried both of these methods and found that my daughter thinks hard if she actually wants it for a particular item. Sometimes it’s a “I’ve got to have it” or “No, I’m okay right now”. It takes the pressure from me, because it can be hard to say no to their little sweet faces.
At the end of the day, I am not trying to raise kids who are afraid to spend money. I am trying to raise kids who understand that money has a purpose.
I want them to know the difference between something they need, something they want, and something they can wait for. I want them to enjoy life, have fun, and even splurge sometimes, but I also want them to understand that every dollar has a choice attached to it.
One thing that has helped us is using simple, hands-on tools.
A small money pouch gives them a place to keep their own money and physically see what they have. I label each pouch as savings, spending, and charity. Each week for allowance, I sit down with them, explain the percentage going into each pouch, and ask how they feel afterwards. My daughter always felt happy to have this responsibility. She even chose a charity on her own that she volunteered with in the past.
Books like Investing for Kids help start bigger conversations about saving, growing money, and planning ahead. It can take a bit of time to get them interested, but once they are, it is worth it.
We have also used fake money to practice counting, budgeting, and making pretend purchases at home.
These tools do not have to make money lessons complicated. They just make the conversations easier. Sometimes the best lessons happen in the grocery store aisle, at the toy store, or when your child has to decide if that candy is really worth spending their own money on.
I know I don’t teach it perfectly as I am still learning myself, but I hope my kids grow up understanding that being frugal is not about never having fun. It is about learning how to make thoughtful choices, enjoy what matters, and build a life where money gives them stability instead of stress.
How do you handle money talks with your kids? When do you think is an appropriate age to start? I’d love to hear from you.
