Kids And Money: How To Teach Them, Help Them Earn And Save As A Family

Money Lessons By Age

The early start matters. A CFPB research report found that children develop the planning and self-control skills behind money habits by ages 3 to 5, and that many core habits are set by about age 7.

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How To Teach Kids About Money

Six habits do most of the teaching, and none of them need special tools.

Say no, and explain why. A store has something a young child wants in nearly every aisle. Saying no often, and adding a short reason ("we're saving for the beach trip"), teaches that money is limited and that choices have trade-offs.

Set the example. Children copy what they see far more than what they're told. If they watch you compare prices, wait for a sale and skip the newest phone, they learn that buying less is normal. Our page on avoiding lifestyle inflation covers the adult side.

Make it a game. Hand a child $5 at a dollar store and see how far it stretches. Challenge them to save a set amount by a set date. Board games like Monopoly and The Game of Life give practice with buying, paying rent and running out of cash.

Talk about money openly. Money doesn't need to be a secret or a source of worry. When a child asks why you can't buy something, "we're putting that money toward something bigger" teaches patience without passing on stress.

Use everyday moments. At the grocery store, show the unit price. Before a birthday party, set a gift budget and let your child pick within it. When you give to charity, explain who it helps and let an older child add some of their own money.

Keep money in its place. Some parents never mention money, and others talk about it constantly. The middle works best: money is a tool that makes life easier, not the point of life.

An Earn, Save, Spend And Give System

Cult of Money writer Alexa Mason built a simple system with her two daughters, starting when they were 4 and 5. They earned small amounts for jobs beyond normal chores, such as $1 each for cleaning their room on a whole-house cleaning day. Small cash they earned or received from family was theirs to spend or save. Gifts of $20 or more went into their college savings.

The system taught them more than any lecture. On a flea market trip with $7 each, both girls looked at everything before buying, counted out their own money, and one came home with change. Later, her older daughter decided that a $50 stuffed bear was worth saving for. Another time, after saving nearly $150 over more than a year, she went to buy the toy she'd been saving for, compared prices, and walked out with only a sheet set because nothing felt worth the money.

Giving was part of it too. When a family nearby took in their grandchildren, the girls sorted through their clothes and gave away what no longer fit, and the youngest gave up a favorite blanket to a child who needed it more.

To copy the system, split money into three or four jars or accounts:

Ways Kids Can Earn Money

Kids who earn their own money tend to spend it more carefully, because they know what it took to get it. Here are jobs that fit different ages.

What The Law Allows In The US

US federal child labor rules set 14 as the minimum age for most regular jobs, according to the Department of Labor. Children under 14 can still babysit occasionally, deliver newspapers, act or perform, and work in a business owned entirely by their parents, as long as the work isn't hazardous. Teens who are 14 and 15 have limits on hours during the school year. States can set stricter rules, and other countries have their own, so check locally before a child takes a regular job.

How Kids' Earnings Are Taxed In The US

A child's earned income is federally tax-free up to the standard deduction, which is $16,100 for 2026, according to the IRS 2026 inflation adjustments. Two catches apply. A child who earns $400 or more from self-employment, such as a lawn-mowing business, owes self-employment tax and needs to file. Investment income above $2,700 can be taxed at the parent's rate under the "kiddie tax."

Earned income also lets a child contribute to a custodial Roth IRA, up to what they earned or the $7,500 IRA limit for 2026, whichever is less. A teen who puts $2,000 of summer job money into a Roth IRA has decades of tax-free growth ahead.

Where Kids Can Keep Their Money

Once the piggy bank fills up, a real account teaches more. Most need a parent or guardian as custodian until the child is an adult.

Trump Accounts

Trump Accounts are a new US savings account for children, created by the tax law signed on July 4, 2025. Contributions began on July 4, 2026. Children born from Jan. 1, 2025, through Dec. 31, 2028, who are US citizens with a Social Security number, can get a one-time $1,000 federal deposit, which parents claim by filing IRS Form 4547.

The program took off quickly. By March 31, 2026, the IRS said 4 million children had been signed up, including 1 million claiming the $1,000 deposit. Family members and others can add up to $5,000 a year in total, and a parent's employer can put in up to $2,500 a year that counts toward the same limit, according to IRS Notice 2025-68. The money must go into mutual funds or ETFs that track the S&P 500 or another index of mostly US stocks, and it generally can't be withdrawn before Jan. 1 of the year the child turns 18.

For a newborn, the $1,000 deposit is free money, so claiming it makes sense even if you save for the child elsewhere.

Kids And Crypto

Kids can learn about crypto long before they can own it directly. Major exchanges, including Coinbase and Kraken, require account holders to be 18 or older, and Trump Accounts and most custodial accounts don't hold coins.

Parents who want to give a child crypto exposure have three main routes:

• Buy a spot bitcoin ETF in a custodial brokerage account. It trades like a stock, so the custodial rules for stocks apply.
• Hold coins in your own account and gift them later. In the US, you can give up to $19,000 per person in 2026 without filing a gift tax return. The child takes over your cost basis, so a later sale is taxed on the full gain.
• Keep the amount small. Bitcoin has fallen more than 70% from a peak more than once. Our page on crypto portfolio allocation shows what that does to a portfolio.

The lessons matter more than the coins. Older kids can learn what makes bitcoin scarce, why a seed phrase is like the only key to a safe, and why not your keys, not your coins became a saying after exchanges failed. Scams aimed at young people, such as fake game currency giveaways and "send crypto, get double back" offers, are a good place to start, and our list of common crypto scams has examples to talk through.

How To Save Money On Kids' Clothes

Kids outgrow clothes and shoes every few months, so this is one of the easiest places for a family to cut spending. Alexa spent so little on her daughters' clothes that she stopped budgeting for clothing entirely. Here's how.

• Ask family for clothes as gifts. Grandparents and relatives often want to buy something. Suggesting clothes and shoes instead of toys that get played with for two days helps everyone.
• Take every hand-me-down that fits. Siblings, cousins and friends' kids are a free source of clothes, and shoes can pass from an older child to a younger one with bigger feet.
• Sell outgrown clothes to fund the next size. Bundle similar items into a "lot" on Facebook Marketplace, Vinted (UK and EU) or a local consignment shop, then spend the money on the next round.
• Buy secondhand. ThredUp in the US and Vinted in Europe sell used name-brand clothing at a fraction of the new price, and thrift stores and yard sales are cheaper still.
• Shop a season ahead. Buy next year's coats and boots at end-of-season clearance or yard sales, and store them in a box marked by size.
• Buy fewer, better pieces. Kids don't need a different outfit for every day of the month. A few durable basics last long enough to hand down.

Cheap Family Activities By Season

Plenty of the best family days cost little or nothing. Here are ideas the Cult of Money team has used, sorted by season.

A few notes from experience. Kids Bowl Free gives registered kids two free games a day at participating alleys in summer, each alley sets its own days and times, and families can buy a pass so adults can bowl too. Some theater chains run cheap summer morning movies for kids. In summer 2026, Cinemark's Summer Movie Clubhouse charged $1.75 a ticket for Wednesday morning shows from June through early August, according to Cinemark. Farm attractions with hay rides and corn mazes charge admission that varies a lot from farm to farm, so compare before you go.

New hobbies can be cheap too. When Alexa gave each of her daughters $10 at a flea market, her older daughter picked a bracelet kit that led to crocheting, a hobby that costs a hook and some yarn and kept her busy for hours. The trick is letting kids find what interests them rather than pushing one on them.

Everyday Ways Parents Save Money

These habits keep a family budget in shape without much effort.

• Pause before buying. Waiting a day before any unplanned purchase cuts impulse spending more than any app.
• Track spending for 30 days. Small purchases add up faster than most people expect. Our ranking of the best budgeting tools covers apps that do the tracking for you.
• Automate savings. Willpower runs out. An automatic transfer on payday doesn't.
• Plan meals for the week. Rotate your family's favorite dinners and shop from a list. Our page on shopping for groceries less often explains why fewer trips save money.
• Buy store brands. Store-brand basics and over-the-counter medicines often have the same ingredients as name brands.
• Use the library. Books, movies, games and free events for kids cost nothing.
• Cook from scratch and grow a little food. Start with a few easy meals and a pot of herbs or tomatoes.
• Stock up on school supplies in back-to-school sales. Buy enough for the whole year so you aren't paying full price in February.
• Look after what you own. Regular maintenance, especially on the car, is cheaper than replacing things early.
• Save for holidays all year. A monthly holiday fund turns December into a planned expense. Our page on practical gift ideas for adults has more on lower-cost holidays.

For the bigger picture, see what it really costs in our page on the true cost of raising a kid, and how one family did it in raising two kids on $20,000 a year.

What To Watch Out For

• Labor and safety rules. Check federal and state rules before a child takes a regular job, and keep younger kids away from mowers, power tools and unsupervised selling.
• Online selling. Most marketplaces require adult account holders. Handle listings and buyer meetups yourself, in a public place.
• Account fees. A $5 monthly fee on a teen debit card is $60 a year, which can be more than a young child saves.
• Taxes. Self-employment earnings of $400 or more mean a tax return, and large investment gains in a child's name can trigger the kiddie tax.
• Who controls the money. Money in a custodial account legally belongs to the child and becomes theirs at the age of majority, so don't put money there that you may need back.

FAQ

At What Age Should You Start Teaching Kids About Money?

Start around age 3. CFPB-backed research found that many core money habits form by about age 7, so simple lessons like handing over cash at a store and saving in a clear jar help early.

Should You Pay Kids For Chores?

Many families split the difference: no pay for normal family chores, and paid jobs for extra work. That keeps chores a shared responsibility while still giving kids a way to earn.

How Much Allowance Should A Child Get?

There's no standard amount. A common rule of thumb is $1 a week per year of age, but the right number depends on what the child is expected to pay for. Raise it as you hand over more spending, such as clothes or outings.

Can A Child Open A Roth IRA?

Yes, if the child has earned income. A parent opens a custodial Roth IRA, and the child can contribute up to what they earned that year, capped at $7,500 for 2026.

Can Kids Buy Crypto?

Not directly on major exchanges, which require users to be 18. Parents can buy a spot bitcoin ETF in a custodial brokerage account or hold coins in their own account, and use small amounts to teach how crypto and its risks work.

What Is A Trump Account?

A US savings account for children that opened to contributions on July 4, 2026. Eligible babies born from 2025 through 2028 can get a one-time $1,000 federal deposit, claimed with IRS Form 4547.