Teaching Our Daughter Financial Literacy (without Making it Boring)

Money talk with kids doesn’t have to wait until they’re teenagers — and it doesn’t have to sound like a lecture either. In our house, we’ve made financial literacy a lived experience from a young age. Not in a strict, numbers-and-spreadsheets kind of way, but through something our daughter can see and feel every time she gets her allowance.

From the beginning, we wanted her to understand that money isn’t just something you spend — it’s something you manage. Every week when she gets her allowance, she divides it into three equal piles. It’s become a little ritual at our kitchen table, and honestly, I think it’s one of the best lessons we’re teaching her.

Pile One: Savings — “The Bank”

The first pile goes straight into savings — or as she calls it, “the bank.”

We talk about why saving matters: that one day, she’ll want or need something big. Maybe that means a new bike, a trip, or something far down the road — like her first car or an emergency fund. We explain that a savings account isn’t just for “grown-ups” — it’s a tool for anyone who wants to feel secure and prepared.

Even at her age, she’s starting to connect the dots between patience, planning, and peace of mind. Watching her excitement grow when she sees her savings add up is priceless. She also enjoys getting to take her money to the bank and show off how much she has saved up.

As she gets older, we will add on to some of the complexities of finances and teach her about investments and credit. But for now, we’re focusing on simple money management.

Pile Two: Bills — “Paying Mom and Dad”

This one always makes people laugh when I explain it, but stay with me.

The second pile is for “bills.” Our daughter pays us — her mom and dad — a little portion each week. We talk about how grown-ups use their money to pay for important things: a place to live, food to eat, toys to play with, and shows to watch. It’s her first exposure to the concept that money supports needs before wants.

Here’s the secret she doesn’t know (yet): we quietly tuck her “bill money” into her savings account. So while she’s learning about responsibility, we’re still making sure every dollar she “pays” stays working for her future. Her allowance is hers, so we’re not technically taking a third away from her. We are simply trying to engrain the habit of her seeing any money she gets as three different piles. And…she’ll thank us later.

This little system gives her a taste of real-world budgeting while reinforcing something bigger — that being part of a family means contributing to the things we all share.

Pile Three: Fun — “Spend It How You Want”

And finally, the third pile: the fun money.

This is her money, completely. She can buy candy, save up for a bigger toy, or spend it all at once. No lectures, no guilt. Because being responsible with money shouldn’t mean being afraid to enjoy it.

We want her to experience the satisfaction of saving — but also the joy of spending intentionally. Sometimes she surprises us with how she uses it; sometimes she learns from a purchase that didn’t quite live up to expectations. Either way, it’s all learning.

Our goal with encouraging her to spend her fun money is so that she doesn’t have this anxiety around money. She can feel secure that her bills are paid and her savings account is growing. We personally know people who are terrified to splurge on traveling or that piece of furniture they’ve wanted or to try that new fancy restaurant. Spending any sort of money makes them anxious. What fun is having that extra money if you’re too afraid to actually enjoy life?

Why We Do It

At the heart of this practice is a simple truth: we want her to have a healthy relationship with money.
Not fear, not confusion, not shame — just awareness and confidence.

By turning allowance into a teachable habit, we’re helping her internalize that balance between responsibility and enjoyment. We’re showing her that money isn’t just about numbers — it’s about values, priorities, and choices.

And if she grows up understanding that, we’ll consider it one of our biggest parenting wins.

Openly Parenting Reminder:
It’s never too early to teach kids how to handle money — not to make them “grow up faster,” but to empower them to grow wiser.