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How to Learn About Spending for Kids

Check out these smart spending habits that will help you save money and still afford all the stuff you want to buy.


When you’re a child, most people will tell you that money’s about spending less and saving more. And it’s true, in a way. But that’s a kiddie explanation.

Are you ready for a more mature convo about spending money? Great. Let’s get started!

Why Budgeting Your Money and Saving Are Important

There are many ways to learn about spending, but it all starts with understanding the difference between wants and needs. Sounds super easy, right? But IRL, it’s a little trickier than you may think.

Oh, you don’t believe us? Check this out:

You’re at the store with your parents. There’s a really awesome set of glittery pens that would just make your homework shine. Literally.

Is this a want or a need? We’re talking about school supplies, so that technically makes the pens a need. But – let’s be honest here – do you really need new pens for school? Don’t you already have three in your backpack?

We’re gonna have to be the bad guys here and call the glitter pens what they are: a want. But that doesn’t mean that getting them for yourself is out of the question. As long as you know that spending money on those pens takes away from other non-essential things in your budget.

Whoa, whoa, whoa…Did you just say that you don’t have a budget?!

Budgets are everything when it comes to good spending habits. Let’s talk about those a little more before we move on to actual spending.

This is definitely about to get good! Are you excited yet?

How to Learn Smart Spending Habits

Spending is a skill that you can only improve with practice, like riding a bike or reading. You just have to keep practicing until you get the hang of it. 

But don’t get us wrong. Splurging every penny you’ve got in your piggy bank isn’t the way to learn good spending habits. We’re talking about learning how to spend correctly through budgeting.

For starters, you need to know how much money you have available and how you want to use that money. For example, say grandma mails you a crisp $20 for your birthday. Have you thought about what you want to do with it? You could:

A) Spend it all on a set of action figures and have zero money again.

B) Put that bill right in your piggy bank.

C) Buy one action figure and put the rest of the money in your savings account.

Think the right thing to do is B? It might seem like the most responsible choice. But, if you’re trying to develop smart spending habits, the answer is C!

First, you must decide how much of those $20 you’re OK to spend. Maybe $10 for spending and $10 for savings? That sounds sensible. And it’s called budgeting.

That’s all there’s to it! Budgeting is simply the process of deciding what you want to do with your money and how you want to spend it. Once you’ve made that choice, you just gotta stick with it.

As you grow up, you’ll have more financial responsibilities and more decisions to make with your money. You’ll also have to track your money and your expenses more closely. But that’s a while from now. In the meantime, keep practicing this and you’ll be on your way to healthy financial habits.

Psst…remember to read our guide on how to save your money as a kid too!

The Role Your Parents Play in Spending Your Own Money

You might be a pretty wise kid and super responsible, but let’s not forget that you’re still a kid. You’ll make money mistakes. You’ll also learn from them. And along the way, your parents will be there to guide you.

While you’re still young, it’s up to them to decide the money rules that you have to follow. But if you show that you’re mature enough, they might let you make more decisions. Little by little, your parents may give you freedom to spend your money however you think is best.


If you want to have spending cash, your parents might also be able to help you with that. Maybe if you offer to pick up some extra chores around the house – beyond the responsibilities that you already have – they could be willing to pay you an allowance.

The amount of money you get and the chores you have to do in exchange are up to them. The good news is that parents are usually happy to help their children learn money lessons. Spending is an important skill, and if you show them that you’re ready, they’ll most likely find a way to support you. Read our guide on allowances for kids to learn more!


Some parents prefer to motivate their children to earn money through a small business. If you’re interested in starting your own business, these are some great ways to begin:

  • Pet sitting
  • Lemonade stands
  • Selling candy
  • Shoveling snow
  • Lawn mowing

We have a big article on how to make money as a kid, so check there for more ideas!

Your Very Own Bank Account

Many banks and financial institutions offer accounts for kids your age! With these accounts, you can have a place to store your money and a debit card to use at stores.

If you think you’re ready for a bank account, talk to your parents and see if they’re on board. Once your parents say it’s OK, you can head to the bank and open an account in person or do it online. A few days later, you’ll receive a debit card and online access to your account.

Through the bank’s website, you can keep track of your spending. You will also receive monthly statements that show a summary of all the money that went in and out of your account during the month. This is a great way for kids to start learning about money management and spending.

Spending Definitions

When you’re learning how to spend your money, it’s also important to understand the meaning of some important words. These are a few of those words, to get you started in your money journey:

  • Checking Account: A type of bank account where you can write checks to pay for things. When you open one of these accounts, you also get a debit car that you can use to pay for items at stores, restaurants, and other places.
  • Checks: A piece of paper that tells the bank to pay money from your account. It’s a way to pay someone without using cash or a debit card.
  • Debit Card: A plastic card that is used to pay for things without using cash or a check. It’s also known as a bank card or a check card. When you pay with a debit card, money goes from your account to the seller’s account.
  • Savings Account: A bank account where you keep the money that you don’t want to spend right now. 
  • Expenses: Money that you need to buy or do something.

Books to Learn About Spending and Budgeting

Do you love to learn about money? And you love to read, too? You’re awesome! That’s why we put together his handy list of books that you’re sure to love. Check out the best books for kids to learn about spending for more recommendations!

Best for Young Entrepreneurs

If you’re into making your own money, you’ve gotta get your hands on Isabel’s Car Wash. It’s the story of a resourceful young girl who finds a way to start her own biz and earn money to buy the doll she dreams of.

Best Activity Book

Are you into quizzes, puzzles, and games? That’s what we thought! A smart kid like you has got to check out the Kid’s Activity Book on Money and Finance. It’s the most fun way to learn how to earn, spend, save, and do more with your dough!

Best to Get the Imagination Going

What if you earned a million bucks? What would you do with all that money? If you love to think of the possibilities, If You Made a Million is the book for you. Because at the rate you’re learning, making a million dollars is not a far fetched idea for a smart kid like you!

Best Ledger

When you make the big buckaroos, you gotta track ‘em too. And the Kids Allowance Ledger is your best tool to keep track of your money. Whether you get an allowance or earn your own money, this handy book will help you figure out the best way to spend your money so you can save more and become rich one day!

Learning how to spend your money wisely is an important skill. Especially because as you get older and become an adult, you’ll probably have more and more money in your account. 

By practicing good spending habits when you’re still a kid, you’ll learn how to make good use of your wealth. Sure, you’ll make some poor decisions along the way. We all do! But the more you learn and the more you practice, the better you’ll get at managing your money.

About the Author

Lucia Caldera

Lucia Caldera is a writer who specializes in personal finance. Her goal is to create approachable content that sparks financial wellness and unlocks personal growth. Lucia's work reflects her passion for financial education as the key to reducing the wealth gap for future generations.

Last updated on: March 21, 2022