4 Fun Activities To Help Children Learn About Financial Concepts

As a parent, it is up to you to teach your child about all the basics of life – and that includes money management. In fact, researchers found that the number one influence on a child’s financial behavior is the parent.

However, many of us fail to teach our children about money. We think they’re going to grow up and just “figure it out” or that we don’t have the right knowledge ourselves to teach them. But that’s no excuse! There are plenty of resources out there that can help you teach your child about personal finance. And it doesn’t have to be boring either. Here are 4 fun activities to teach your child about financial concepts such as budgeting, saving, compound interest, and even charitable giving.

Saving & Delayed Gratification

This is a great activity to do with your kid because not only does it teach them about saving money, but it also teaches them about the life cycle of a butterfly!

Delayed gratification is a skill that most 4- and 5-year-olds have trouble with, but the promise of seeing an actual butterfly emerge out of “nowhere” can be a pretty good motivator. You will need to get some caterpillars and a setup for them, but that’s about all the planning you need to do.

It takes about a month for a caterpillar to turn into a butterfly. During this time, encourage your child to do simple tasks like stocking the enclosure with fresh food and cleaning up the frass. As for the money aspect, have a glass jar set up and put a dollar in it when the butterfly reaches each new stage of development – making it all the more rewarding for your child.

Budget & Bargain

There’s nothing quite as rewarding as dessert for a kid (or adult), so this is a great way to teach children about budgeting and getting a bargain (i.e. saving money).

You will first need to make a trip to your local bakery to find out how much your child’s favorite dessert costs – pies, cakes, cupcakes, whatever their heart fancies! Then you help them look up a recipe for the same dish and draw up a budget for the ingredients.

The goal is to spend less and make it at home, so you can take your kid grocery shopping and ask them to pick things out. Remind them that the whole cart should cost less than what the dessert costed at the bakery. If it doesn’t, ask them to see what ingredients they can swap or find cheaper alternatives to keep it under budget.

Being Charitable

Charity is one of the most important financial habits that a parent must instill on their child, and it is a concept that even children as young as 3 or 4 can understand. To start, talk to them about the little charitable donations you make on a daily basis, such as putting a dollar into the charity fund jar at the grocery checkout. Explain to them how a few dollars can make a big difference to someone in need.

Then you can encourage your child to start collecting their own charity fund. Make it more exciting by offering to match every dollar they save with a dollar of your own. Involve your child in researching organizations that can do a lot with a little bit of money. For instance, BlinkNow is an organization that helps a community in need in Nepal. They put out videos talking about how $5, the cost of a cup of coffee, can affect a person’s life. Another alternative is to go to local charities like your nearby animal shelter or help someone in your community pay for medicine or groceries. Real impact that they can see and understand motivates your child to give more.


Compound interest is one of the key principles of finance. When you “invest” your money in an interest-bearing account, it will earn interest and grow. Not only that, the interest you previously earned will earn more interest the next month too. It’s a pretty cool concept which basically results in free money. Who doesn’t like free money!

To teach your kid about compound interest, here’s a fun activity. Give them a penny and tell them that as long as they do not spend it, it will double every day. (Yes, a 100% interest isn’t very similar to a real-world situation, but go with it for the sake of education). The second day, give them one more penny. On the third day, given that the total is now two pennies, give them two more. Keep going until the 11th day (unless you want to spend some serious cash), but by that time, they’ll already have $10.24 all thanks to the magic of compound interest!