This article was originally printed in the April 2026 issue of ‘hood Magazine. To see this article in print, and to read the rest of the issue, check out our digital issue.
By: Sarah Kurtenbach
Did you ever take a class in elementary school called How to Be Financially Successful by 35? No? Same.
Unfortunately, our kids probably won’t either. But here’s the good news: financial habits start long before Algebra 1, and they compound over time (the good ones and the “why did I buy that?” ones).
What a 5-year-old needs to understand about money is wildly different from what a 12-year-old needs. Teaching the right lesson at the right time allows money to become normal, empowering, and maybe even a little fun to talk about at dinner.
Here’s the age-by-age breakdown.
5-Year-Old: Money is earned and it has categories.
Keep things simple for your 5yo. First, ensure they understand that money isn’t “a magical card that you swipe and get everything you want.” It’s connected to your hard work.
Explain that money comes from working, and when you swipe a card, money leaves your account (and unfortunately does not magically reappear).
Pay your child when they work or do chores. If they don’t do the chore, they don’t get paid!
Then divide their money into three jars: Give, Save, Spend. This teaches a powerful early truth: money has categories. Not every dollar is for candy.
Bonus: you’ve just introduced budgeting without calling it budgeting!
8-Year-Old: You have control over where you money goes, so choose wisely.
Eight is when empowerment begins.
Now they can start making real choices within those Give/Save/Spend buckets such as:
Give: Allow them to choose where they give their money, whether that’s to a church, a friend in need, or a cause they’re passionate about.
Save: Show them how much they have in their savings account. Explain that savings are used for things they want to buy in the future, such as a laptop, car, college, or (yes) even a neon scooter.
Spend: Help them set a goal for something they would like to buy. Keep a chart of how much money they earn each week until they reach that goal. Seeing your child buy something they’ve worked hard to afford is next-level!
12-Year-Old: Money decisions today shape your future.
By 12, they’re ready for bigger concepts: banks, interest, and investing.
This is a great time to introduce investing. If you’re unsure how to set up an investment account, consider meeting with a financial advisor (and bring your child along)! Use a basic interest calculator to demonstrate how money grows over time, and prepare for their minds to be blown.
If they want extra cash, encourage entrepreneurship, such as babysitting, lawn care, or small side hustles.
At this age, the most important lesson is simple: money decisions today shape your future.
You may not have had a wealth-building class at 10, but with these simple steps your kids absolutely can.
Sarah is a local mom of two who knows a thing or two about financial literacy. She is the founder of moveHER Money, where she teaches girls how to be financially savvy.
