Teaching 5–7 Year Olds About Money & Investing: A Parent’s Step-by-Step Plan

The 4 Big Goals for Ages 5–7

The plan is built around these core learning goals:

1. Recognise and understand money — coins, notes, and their value.
2. Understand earning — money comes from work or effort, not just from parents.
3. Learn saving vs. spending — you can’t buy everything right away.
4. Be introduced to investing — in the simplest, most fun way possible.

The Step-by-Step Plan

Step 1: Money Recognition & Value

Goal: Teach kids to recognise different coins and notes, and understand what they are worth.

How to Teach:

• Money Show & Tell
  Gather Australian coins and notes. Let your child touch, feel, and compare them. Talk about the numbers and pictures.

• Coin Sorting Game
  Give them a pile of coins to sort into groups (all 5c coins together, etc.).



• Price Tag Play
  Use sticky notes to write prices (e.g., 50c, $1) and stick them on toys or snacks. Use real or pretend money to “buy” items.

Tip: Use Aussie currency only so they relate it to real life.

Where Money Comes From

Goal: Show that money isn’t magic—it comes from working, creating, or providing value.

How to Teach:

• Chores for Coins
  Introduce a small, optional “earn” system for extra chores (e.g., 50c for feeding the pet, $1 for helping in the garden). Keep regular chores separate so they understand responsibilities vs. extra effort.

• Role-Play Jobs
  Play “shop” or “restaurant” where they “work” to earn pretend money.



• Storytime Lesson
  Read books like Bunny Money (Rosemary Wells) or Curious George Saves His Pennies.

Parent Script Example:
"Mum and Dad go to work to earn money, just like you can earn money when you do extra helpful jobs."

Needs vs. Wants

Goal: Help them understand that some things are essential (needs) and others are just nice to have (wants).

How to Teach:



• Sorting Game
  Cut out pictures from magazines (food, clothes, toys, holidays) and sort them into “Needs” and “Wants” piles.

• Shopping Helper
  At the supermarket, ask them to find one item you “need” (like bread) and one “want” (like ice cream). Talk about the difference.

• Money Choices
  Give them $2 and let them choose between a toy or saving for a bigger item later.

The Three Jars System

Goal: Teach saving, spending, and giving as equally important habits.

Setup:

Label 3 jars:

1. Spend (for small treats and toys)
2. Save (for bigger goals)
3. Share (for helping others)

How to Teach:

• Each time your child gets money (from chores, gifts, or allowance), they divide it into the jars.
  Example: 50% Spend, 40% Save, 10% Share.
• Talk about why we don’t put all money into Spend.
• Let them use Share money for a cause (donating to an animal shelter, buying food for a food bank).

Tip: Clear jars let kids see their money growing—very motivating.

First Introduction to Investing

At this age, “investing” doesn’t mean charts, stocks, or complicated terms. Instead, you’re teaching the idea that money can grow if you use it wisely.

How to Teach:

• Magic Growing Money Game
  Give them $1 to “invest” in your family shop (e.g., you “sell” them a pretend fruit stall). At the end of the week, you “pay” them back $1.10. Explain:
  “You put your money into the stall, and it grew because people bought the fruit.”

• Planting Seeds Analogy
  Plant a seed together and talk about how, just like seeds grow into bigger plants, money can grow over time when you invest.



• Piggy Bank Bonus
  If they leave their “Save” jar untouched for a month, you add a “growth bonus” of 10% (e.g., if they had $5, you add 50c).

Parent Script Example:
"Investing is like planting seeds—you put in a little, wait, and end up with more."

Setting Goals

Goal: Teach them to plan for something they want, rather than buying right away.

How to Teach:

• Goal Chart
  Use a printable savings tracker. Draw the item they want at the top (like a bike), then colour in a bar as they save.



• Short vs. Long Term Goals
  Short-term: a $5 toy.
  Long-term: a $40 Lego set.
  Explain that some things take longer to save for.

Real-Life Practice

Goal: Let them use money in real situations.

How to Teach:

• Market Day
  Give them a small budget at a weekend market to choose their own snack or toy.

• Family Shop
  Set up a shop at home with items they can “buy” using real coins.



• Birthday Budget
  If they receive money as a gift, guide them to split it into Spend, Save, and Share jars.

Weekly Teaching Schedule Example

Here’s a 4-week plan you can repeat or adapt.

Week 1: Money Basics

• Activity: Coin sorting, pretend shopping.
• Lesson: What money is and what it’s worth.

Week 2: Earning Money

• Activity: Chores for coins, role-play jobs.
• Lesson: Money is earned, not endless.

Week 3: Saving & Spending

• Activity: Set up Three Jars system.
• Lesson: We make choices about where money goes.

Week 4: Investing Basics

• Activity: Magic Growing Money game, plant a “money seed.”
• Lesson: Money can grow over time.



Everyday Opportunities for Learning

You don’t need to sit your child down for “money lessons” every day—use natural moments:

• At the shop (“We’re buying bread because it’s a need.”)
• When they want a toy (“Let’s see if your Save jar is ready.”)
• When watching TV (“That ad is trying to make us spend money.”)

Common Mistakes to Avoid

1. Giving money without explanation — always link it to effort or a decision.
2. Overcomplicating investing — keep it about growth and patience.
3. Never letting them make mistakes — small “bad buys” are valuable lessons.
4. Not being consistent — habits stick with repetition.

Tracking Progress

Use a Money Skills Checklist for ages 5–7:

✅ Can recognise coins and notes.
✅ Knows money comes from work.
✅ Can explain needs vs. wants.
✅ Uses a simple saving system.
✅ Understands money can grow.

Fun Resources to Use

• Books:
  Money Plan by Monica Eaton
  Alexander, Who Used to Be Rich Last Sunday by Judith Viorst

• Apps/Games:
  PiggyBot (allowance tracker)
  Pretend Play Store (for younger kids)



• Printables:
  Coin recognition sheets
  Three Jars labels
  Savings goal trackers

The Parent’s Role

Your role is to:

• Model good money habits — kids copy you.
• Make it fun — keep lessons playful.
• Repeat often — use small daily conversations.
• Celebrate milestones — when they reach a goal, make a big deal of it.

The Long-Term Impact

Teaching your 5–7-year-old about money now:

• Builds confidence in making choices.
• Helps avoid bad spending habits later.
• Introduces the idea of patience and delayed gratification.
• Lays the foundation for smart investing in their teen years.

By the time they’re 8–12, they’ll be ready to learn about more detailed investing concepts like shares, interest, and risk vs. reward—without feeling overwhelmed.