Money Facts Kids Should Know by Age 18

Research shows that more than 70% of parents in US are reluctant or embarrassed to discuss money issues with their kids. They feel like it is an unnecessary, and a burden, or because they do not want their child to go through or understand the issues before ‘they are of age’. What this does is not allow the kid to learn money management from a very young age. As a result, they face difficulty in getting control of their monetary situation later in life.

Hence, it is essential that you teach your children about the use and abuse of money from a very young age so that by the time they turn 18, they have the basic skills to survive on their own. Read on to find out what everyone needs to know before they are of the legal age.

What are Savings?

This is the first lesson that should be taught and practiced from a very young age. The sooner the kids find out about the importance of savings, the more easily they will be used to not spending everything they get. If you are a parent or a guardian teaching the child about money usage, then tell them about how savings will save them. Whatever amount is given to them, ask them to save 2% of it in their piggy bank. By the time the child is 18 they will already be used to taking a certain amount of money out of the spending money and keeping it safe.

Keep in mind that a goal needs to be attached to the saving concept; otherwise, why else would the kid be interested in the concept of securing a certain amount? This goal can be anything from buying their favorite toy to investing in a bicycle, etc.


Once the child is in elementary school, open a junior bank account for them. This is the time when the idea of investment comes into the picture. A savings account has certain interest on the sum saved. This means that the child would be able to get something on the amount they save each month. If you give pocket money to the child, say $50 each month, then they should be able to save at least $15 and get $1-2 as interest on it. This way, by the end of the year, they will have quite a sum saved that can be used on anything they want to buy.


Investment from an early age would mean that your child understands the value of money, and becomes independent and responsible for their education without any worry about paying the semester fee for college. Investment can be in the form of savings account in a bank or investment in some other stock market. It is highly recommended that you teach your child about how investment is done before they turn 18. This way they can continue to increase the savings they have.

Credit Card = Affordable Items

Credit cards are like sink holes that can swallow you whole if you are not careful. This is the reason that even if your child has a credit card by the age of 16, they should only use it on items that are affordable and can be paid in full by the end of a month. Teach them about how penalties are levied and how interest rates increase the more they delay paying off the credit card loans.