Choo Choo Train

How to Teach Young Children About Money

This month at Choo Choo Train we are teaching our children about money. Beth Kobliner, a member of the President’s Advisory Council on Financial Capability says children can grasp financial concepts like saving and spending as young as three years old. A research by the United Kingdom’s Money Advice Service reported that kids’ money habits are formed by age 7. Thus, it is wise to start finding everyday moments to teach them about money as soon as possible.

As a parent, you are the number one influence on your child’s financial behaviours. When all parents collectively start teaching money lessons early, we can raise a generation of mindful consumers, investors, savers, and givers. Here’s what and how you can teach your 3-5 years old child about money.


Your 3-5 years old child needs to learn that she may have to wait to buy something she wants. It is a hard concept for people of all ages to learn, but a kid’s ability to delay gratification can predict how successful they will be as a grown up. It is crucial to teach them that if they really want something, they should wait and save to buy it.


  1. Create three jars for your child – each labelled ‘Saving,’ ‘Spending,’ and ‘Sharing.’ Every time your child receives money, divide the money among the jars.
  2. When you go into a store with your child and they ask for something, say, a toy, avoid simply buying. Instead, talk to them about its price, tell them you don’t have the money for it and suggest them to start saving to buy it later.
  3. Set your child up for success. If the toy is too pricey, come up with a matching program like a personal allowance to help them reach their goal to buy it in a reasonable timeframe. Otherwise, offer a similar toy with a lower price tag.
  4. Every time your child adds money to the savings jar, help them count up how much they have, talk about how much they need to reach their goal, and when they will reach it. It is actually fun for kids and it gives them a sense of the importance of waiting, being patient, and saving.
  5. Let them learn that going into a store doesn’t always mean you’ll buy something. Explain that you are in the store to get X for Y purpose, and not to buy anything for them.

Other than these direct teachings, you can also teach your child the importance of waiting while they line up. As for us at Choo Choo Train, we are teaching children about money through play!