5 Key Methods to Educate Your Child on Appreciating the Value of Money

As a parent, getting your child on the right track to smart financial management is extremely important, and it starts with making them understand and appreciate the value of money. In fact, the money habits you teach them today may stay with them for life and serve them well when they become working adults. There are many different ways to help children understand money. Remember each child is different and may require a different approach to ensure that their learning is successful. 

After reading this article, you will be able to identify 5 methods that you can use in teaching your children about money.  

1. Bring them grocery shopping

As a parent, you have probably taken your child grocery shopping countless times. On your next outing, instead of just letting them sit in the shopping trolley, why not get them to do the shopping for a change? Explain your intention to your child and treat the exercise as a “grocery shopping game”. Give them a fixed amount of money, for example RM5 or RM10, and challenge them to purchase as much food as they can. To make it more systematic, you could tell them that the “food bank” needs certain essential food items such as milk and bread. The challenge will be for your child to buy as much of these items as possible with the limited amount of money given to them.

Another way of doing this is to let your child have your actual grocery list, and as they move around the aisles to shop, help them to calculate how much the items will cost as well as identify sections where cheaper priced items are available. Remember to reward them when they choose the more reasonably priced items!

2. Get them involved in the management of your budget

If your child is old enough to understand the concept of a family budget, try handing them the responsibility of being in control of certain sections or categories in it. You can start by letting them choose a single category or section to manage for a month. Choose a type of expense that is flexible, where you get to control how much or how little to spend. Examples of flexible sections in a budget include groceries and entertainment.

Let your child do his or her own research to find the most ideal prices, and let them allocate the budget in the way they feel is most appropriate. It is fine if they make mistakes such as overspending or picking an expensive brand, because this will also present an opportunity to teach them about balancing needs and wants, as well as making responsible decisions when faced with various choices in the market. 

3. Show them how to use budget tools

The Internet offers a multitude of free and paid online budgeting tools that you can teach your child to use. Here are some websites with easy-to-use budgeting tools to get you started:

If you are already using an online personal financial calculator, get your child involved in using it too. If they are familiar with playing games like “Angry Birds” and “Fruit Ninja” on your smartphone or tablet computer, budgeting would seem like just another refreshing game or challenge to them.

They can even set up their own budgets on it to plan their spending and savings. Best of all, learning to track expenses is a great way to prepare them for real life, when they will need to manage their own household budgets.

4. Take your child to the bank

Does your child have a savings account yet? If not, what are you waiting for? Take your child to the bank and show them around. As a start, open a savings or investment account and explain to them how interest earned will make their money grow. To get them excited about saving, buy them an attractive coin box so that they will look forward to putting money in it. In fact, most banks give away nice coin boxes to children who open a savings or investment account.

When the account statement arrives, attract and hold your child’s attention by emphasising how the savings has grown bigger, thanks to the magic of compounding interest. Once saving becomes a habit, your child will always think of a coin box (and saving) when he or she is given money.

5. Allow them to make mistakes (and learn from them)

Let your child make mistakes because when they are young, the amount involved is usually small. For example, if they absolutely must have a particular toy and somehow managed to save up enough money to buy it, let them do so, so that they can later experience the feeling of not having any money left to spend on other things. Then ask them whether their spending choice was a sound one.  You will be surprised, given rational thinking and pondering, that your child will eventually be able to differentiate between smart purchases and wrong decisions.


When it comes to teaching your child about money, it is never too early  to start. By educating them on appreciating the value of money, you will guide them on the right path towards smart financial management in future. The more opportunities your child has to work with and manage money, the more financially savvy they will become.

Let SC’s Captain Cash help you cultivate a savings habit in your child easily. Find out more about our Kids & Cash programme at http://www.investsmartsc.my/programme/kids-and-cash


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