How do I teach my 5 year old about money?
By Calm Money Kids · · 5 min read
A lot of parents notice that 5 is the age when their child starts counting everything, from stairs to grapes. You can teach a 5 year old about money by letting them count real coins, spend a little of their own money, and wait a few weeks for one small thing they want. These three habits show your child that money is counted, that it runs out, and that waiting pays off.
What can a 5 year old understand about money?
Most 5 year olds can count a small pile of coins and understand that things cost different amounts. They can also learn that when money is spent, it is gone.
Many kids this age still think a bigger coin is worth more than a smaller one. They also think mostly about today, so a month can feel like forever.
Knowing this matters because it keeps the lessons small enough to work. In Calm Money Kids, a 5 year old is an Early Explorer, and the app gives you activities made for this stage.
What is new about teaching money at age 5 compared to age 4?
At 4, your child mostly watched and dropped coins in with your help. At 5, they can start counting the money themselves.
The allowance also goes up to $5 a week. The jars are no longer equal, because the Grow jar now gets $2 and the other three jars get $1 each.
When your child turns 6, you can read how to teach a 6 year old about money.
Why should you teach your 5 year old about money now?
Kids this age see grown-ups pay with a tap of a card or a phone. If they never count real money, they do not get to see it leave.
A child who counts out their own coins learns early that money has an end. That lesson costs $1 at age 5, and it costs much more to learn later.
How do the four money jars work for a 5 year old?
Each week on Family Money Day, your child splits $5 into four jars. The jars matter because they give every dollar a job before it gets spent.
The app keeps track of each jar for you, so you can use real jars at home, the app, or both.
The Grow jar gets $2 because it has the longest wait
The Grow jar holds money for when your child is grown up, and it now gets the most. A 5 year old may ask why, and a simple answer works best.
You might say, "Grow gets the most because it has to wait the longest."
It helps to draw a tree on paper and add a leaf each week that money goes into the Grow jar.
The Dream jar gets $1 for one small goal
With $1 a week, a good goal costs about $2 to $4, so your child can reach it in two to four weeks. A longer wait is too hard at this age.
You might say, "Your toy costs more than one week of Dream money. If we save for three more weeks, you will have enough, so let's put a sticker on the calendar for each week."
The Spend jar gets $1 to use this week
The Spend jar is your child's own money for something small. Let your child count out the coins before they pay, because counting is the lesson at this age.
The Give jar gets $1 to help someone
The Give jar is filled every week, and once a month your child chooses who it helps.
You can ask, "Who do you know who could use some help or a smile?"
How do you teach a 5 year old that money is gone once it is spent?
Say your child spends their Spend dollar on a bouncy ball on Monday. On Wednesday they see a pack of stickers and ask for it.
This is the moment the lesson happens, as long as you do not fill the jar back up.
You can say in a calm, kind voice, "Your Spend jar is empty today, and we can look again on Family Money Day."
It matters because your child feels the end of the money while the cost is tiny. In Calm Money Kids, you can check what is in the Spend jar on your phone, so the answer is never a guess.
What are three money activities to try with your 5 year old this week?
Each of these ideas takes about five minutes. You can start with the one your child would enjoy most and save the others for next week.
- Let your child count out the coins for each jar on Family Money Day.
- Play store at home with pretend money, and practice saying, "That costs too much, so I will pick something else."
- Draw a progress bar for the Dream jar, and let your child color in one part each week with crayons.
Common questions about teaching a 5 year old about money
How much allowance should a 5 year old get?
In Calm Money Kids, the allowance is $1 for each year of age, so a 5 year old gets $5 a week. That is $2 for Grow and $1 each for Dream, Spend and Give.
Should a 5 year old use real coins or an app?
Both work well together. Real coins let your child hold and count the money, and the app keeps track of the totals for you.
What if my 5 year old wants to spend their Dream money early?
Talk about it first, and count together how many more weeks the goal would take. Then let your child decide.
Help your 5 year old count, spend and wait this week
A 5 year old learns about money one coin at a time. A few minutes of counting each week will teach more than any long talk.
Calm Money Kids keeps track of every jar and gives you activities that fit a 5 year old.