For Parents

How to Teach Your Kids About Money Math

So, how do you teach money math? Let us count the ways! Here are our foolproof strategies.

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There are a lot of things that no one prepares parents for. Sure, everyone has tips about how to get your toddler to bed or how to teach them right from wrong. But how exactly do you teach your youngster money math? Somewhere between getting them to eat healthily and answering all their questions about the surrounding world, you have to teach them how to handle money and the value of a dollar. 

That’s equally true for those of us with teenagers. If you have a middle schooler, you know it’s only a matter of time before they get a part-time job. That makes it even more critical that they learn what to do with funds and how to make the most of a paycheck.

So we’ve compiled everything you need to know about teaching money math to your kids.

How to Explain to Your Kids The Importance of Money Math

Explain the importance of money math by keeping your examples true to life. Focus on the fact that money is used to buy food, clothes, and other necessities. From there, teach them the difference between paper money and coin. The dollar is a good starting point. Break the dollar down into its coin equivalent. For example, 100 pennies, 4 quarters, etc.

Coins

Coins can be tricky for young children. It’s tough for them to understand how 100 pennies is worth less than $5.00. The best way to explain this without deep diving into fractions is to get them used to simple coin combinations using a max of 2-3 or coin denominations. Next, they sort coins using separate exercises for size, color, and value. Feel free to skip ahead to value for older or more advanced kids.

Some children may get in the habit of only using the coins they feel comfortable counting even if there are more efficient combinations. This can manifest as them preferring to count pennies because certain other coins confuse them. To curb this habit, start removing coins that they have mastery over. Or limit their coin amounts to the point that it requires a variety of coins to reach the total.

Bills

Repeat the sorting exercises for bills, and then have your youngster count coins that equal the bill denomination. This helps reinforce their understanding of coin values and shows them that paper money is worth more than its weight in nickels and dimes. When counting bills, start with the higher denominations first. It’s easier to add them in order rather than bouncing between denominations.

How to Teach Your Kids Money Math

Once your child has a good sense of value and money combinations, then it’s time to move on to more practical uses. Here are a few exercises you can trust to teach your kid how to handle money.

Diner

Have a restaurant-themed playdate with your kid, and then give them the bill. It’ll be up to them to pay the bill with any combination of dollars and coins. Start with a round number for the dinner bill, I.E., $20.00, $10.00, etc. As they advance, mix in exact numbers and change amounts.

Money Riddles

Money riddles are a great way to engage your child’s critical thinking skills. A few examples of money riddles include:

  1. You have five bills that, when added together, total $25.00. – What bills do you have?
  2. I am physically smaller than a penny but worth ten times more. – What am I?
  3. You purchased something for $4.89, $3.00, and $1.79. – What’s your total?

Multiplication and Skip Counting

Skip counting teaches your kid to get to the sum total quicker. For example, getting from 5 to 10 to 15 with 5 dollar bills or any mix of money. The easiest way to teach this is with the multiplication table. For this, you can use a multiplication chart like the kind found in the back of composition notebooks. Flashcards are another great option, and they let you mix and match the math problem to keep your kid engaged.

Ice Cream Game

Find or make an outline of ice cream. Then assemble a list of money math questions. For every question they get right, add a scoop of ice cream. You can even color the scoops together after each question and then use the time to explain the correct answer better. Once they reach the maximum amount of scoops, 5-10, reward them with a prize.

Household Reminders

There’s a reason every classroom has educational posters. Immersing your child in education gives them more time with the concepts you want to teach them. For example, having a sign by their bedroom door that breaks down money values helps give them an additional resource between lessons.

It doesn’t matter where you hang the poster as long as it’s visible to your kid.

Taxes

If you have a kid entering middle school, you’ve probably already considered what their first job will be. If you haven’t, then they certainly have. This means it’s only a matter of time until they start asking what the gross pay on their check is and why they make so little.

Teach your pre-teen about taxes by breaking down what income taxes are. The best way to do this is to go over a recent pay stub.

Tax knowledge is just as important for younger children, at least in sales tax. Otherwise, they may purchase something with exact change only to find out that they’re a little bit short. Use flashcards with other money terms to teach your child about taxes.

Money Math Definitions

There are certain money math terms that any child will need to know to be successful later in life. Here are words you can use to describe those terms to your kid. 

  • Savings: Savings is money that you don’t want to spend anytime soon. You don’t want to spend it because you’re keeping it to buy something that you don’t have enough money for yet. Or because you want to have more money later. 
  • Budget: Budget means putting money aside to pay for things that you always want or need. Budgets also stop you from spending too much money and not having any for later. 
  • Spend/Debit: Spending money is money that you can use to buy things you want like toys, candy, or clothes. 
  • Change: Change is another word for coins. It’s also what the cashier gives back to you if you give them too much money.
  • Taxes: Taxes are money that you have to give to the government. Everyone pays taxes because it’s how public schools, hospitals, and others afford their purchases and bills. It’s everyone’s job to support those jobs because those jobs help keep us safe, healthy, and smart.

Books for Parents about Teaching Your Kids Money Math

Books are a great resource to teach your kids about money. Especially the classics like Dr. Seuss’ “One Cent, Two Cent, Old Cent, New Cent.” But not all money math books are created equal. A good book for the task needs more than bright colors and friendly characters. Here are three money math books for kids that we recommend. Check out our kids’ money books library for more recommendations!

Money Math: Addition and Subtraction by David A. Adler

This breezy kid’s book has bright colors, friendly characters, and realistically depicts both paper and coin money. And it includes fun money riddles to test your child.

The Grapes of Math by Greg Tang

Grapes of Math is chock full of money riddles, and the book rhymes. What kid doesn’t love a good rhyme? It makes the answers easy to memorize, and your kid can revisit the riddles to solve a whole bunch of day-to-day money problems. 

The Four Money Bears by Mac Gardner

Mac Gardner’s book, The Four Money Bears, breaks down money terms in an easy-to-understand manner. Plus, it has easy to distinguish characters representing a type of money math. This book is excellent for kids who grasp addition and subtraction but have difficulty learning the different terms. 

The most important thing to remember when teaching your kid the ins and outs of their wallet is patience. We all learn a little differently, and many children excel in one thing and are a little slower in another. That’s fine. It’s only a matter of time that they understand money, provided you teach them correctly.

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About the Author

Chadhurst Sharpe

Chadhurst Jainlett Sharpe spent over six years working as a personal finance banker. He's passionate about giving young minds the tools and resources they need to succeed with money.

Last updated on: May 3, 2022