Chores you assign your child must be age-appropriate.

How to Teach Kids Money Management With Chores

by Karen LoBello

You turn down your child’s request for a new toy and she takes on a different personality. Is that my sweet little daughter throwing a tantrum? It’s time to start talking money. Teach your child the natural consequences of money at an early age, advises Neale Godfrey, author and chairman of Children’s Financial Network, Inc. When she understands that mommy and daddy “buy" things in a store, she’s old enough to earn money for chores.


Your child can place napkins on the table. Teach her to fold them and show her where they go. She can collect laundry from baskets and bring it to the wash area. A preschooler will be proud when she sorts light and dark clothes and helps you put them in the washer. She can dust a room, but keep her away from that Ming vase! Godfrey recommends buying a broom and dustpan made for a child so she can help you sweep inside and outside the house. “Helping” is the operative word for this age group.


Godfrey recommends paying children their age per week, so a 3-year-old gets $3, and a 4-year old gets $4. It may seem like a lot, but you are asking them to budget and divide up their money. They can’t do this if they don’t have enough money. In addition to earning money, they learn life skills, understand how to be good citizens of the household and experience the joy of a job well done. Your little one will feel empowered if she is contributing and earning money doing grown-up activities.


Buy four clear plastic containers -- children like to see their money, and this makes counting and math come alive. Godfrey advises labeling each jar: charity, quick cash, medium-term savings and long-term savings. Have your child draw a picture on each one. Help her put 10 percent in savings and 30 percent into each of the other containers. Charity can be as simple as dropping money in a container at the diner to help rescue animals. Set parameters for quick cash, such as no candy, but otherwise give her control. She can buy the toy if she has quick cash. Little ones can only save for a week or two for a larger item. Take her with you to the bank, so she can begin to understand savings.

Needs versus Wants

The key is helping your child understand the difference between a need and a want, according to author and financial investigator, Pamela Yellen. Hold family meetings and talk to your children about where the money goes. Teaching by example is critical. If you tell your child one thing but do another, she will catch on quickly. Explain there are things you’d like to buy, but you must forgo them. Create family experiences that cost little money but provide lasting memories.


Play financial literacy games, advises Ken Damato, CEO of Free online games are available that teach basic money skills to children, even at a young age. You can print stories and coloring pages about money. She will enjoy them and not even realize she’s learning. Create your own games at home. For example, for coin recognition, have her guess which coin you are hiding behind your back.

About the Author

Karen LoBello is coauthor of “The Great PJ Elf Chase: A Christmas Eve Tradition.” She began writing in 2009, following a career as a Nevada teacher. LoBello holds a bachelor's degree in K-8 education, a secondary degree in early childhood education and a master's degree in computer education.

Photo Credits

  • George Doyle/Stockbyte/Getty Images