Teaching 8–12 Year Olds About Money & Investing: A Parent’s Complete Guide

Core Learning Goals for Ages 8–12

Your plan will focus on these key skills:

1. Budgeting & Tracking – Knowing where money goes and making a plan.
2. Saving for Short- and Long-Term Goals – Patience and delayed gratification.
3. Earning Money – Exploring ways to create income beyond allowance.
4. Understanding Interest – Both simple and compound.
5. Intro to Investing – Basic types of investments and how money can grow.
6. Smart Spending Choices – Avoiding impulse buys.
7. Giving Back – Understanding the value of generosity.

Step-by-Step Teaching Plan

Step 1: Budgeting Basics

Goal: Teach kids to plan their money before they spend it.

How to Teach:

• The 50/30/20 Rule (Simplified for Kids)
  50% Spending (fun + small needs)
  30% Saving (short-term goals)
  20% Investing or Long-term Savings

• Use a Budget Sheet
  Create a simple table with columns for Income, Spend, Save, Invest.

• Monthly Money Meeting
  Sit down together once a month to review what they earned and how they used it.

Activity:
Give them $10 (real or pretend) and a list of possible purchases/goals. Let them divide it into their budget categories.



Step 2: Saving with Purpose

Goal: Help them set SMART goals (Specific, Measurable, Achievable, Relevant, Time-bound).

How to Teach:

• Choose 1 short-term goal (like a $20 game) and 1 long-term goal (like a $100 bike).
• Use visual trackers—charts, jars, or apps—to monitor progress.
• Celebrate milestones, not just the final goal.

Activity:
Create a “Savings Thermometer” poster to colour in as they save.



Step 3: Earning Money Beyond Allowance

Goal: Encourage creativity and work ethic.

Ideas for Earning:

• Extra household jobs (organising garage, washing car).
• Pet walking or feeding neighbours’ pets.
• Selling crafts or baked goods with parent help.
• Offering a simple service (watering plants, recycling bottles).

Lesson:
Money isn’t just “given”—it’s earned by providing value.



Step 4: Interest – Your Money Making More Money

Goal: Show how money can grow without extra work.

How to Teach:

• Simple Interest Example:
  “If you put $100 in a savings account and the bank gives you 2% interest per year, you’ll get $2 each year.”
• Compound Interest Example:
  “If the interest is added to your money each year, the next year you earn interest on your interest. That’s how it grows faster.”

Activity:
Use marbles or Lego bricks to represent money growing each “year” with interest. This makes compounding visible.

Parent Script Example:
"Interest is like a bonus the bank gives you for letting them hold your money."



Step 5: Introduction to Investing

Goal: Build awareness of how investing works and why it’s different from saving.

How to Teach:

• Explain Investing Simply:
  Saving is safe but grows slowly. Investing can grow faster but has some risk.

• Types of Beginner Investments:
• Shares (owning part of a company)
• Property (owning land/buildings)
• Managed funds (lots of people pooling money to invest together)

• Use Real-World Examples:
  If they love Lego, explain that people can buy Lego’s parent company shares.

Activity:
Set up a “mock investment portfolio” using a few well-known companies. Track their value each week and discuss changes.



Step 6: Smart Spending

Goal: Teach them to think before buying.

How to Teach:

• The 24-Hour Rule: Wait a day before buying something you want.
• Value over Price: Discuss why sometimes a higher-quality item is better long-term.
• Advertising Awareness: Talk about how ads are designed to make us spend.

Activity:

Watch a TV ad together. Ask:



1. What is it trying to sell?
2. Do you need it or just want it?
3. Is there a better option for the money?

Step 7: Giving & Generosity

Goal: Build empathy and social awareness.

How to Teach:



• Set aside a small percentage (5–10%) for donations or acts of kindness.
• Let them choose where to give (animal shelter, children’s hospital, environmental group).
• Show the impact of their giving through photos, visits, or thank-you notes.

4-Week Money & Investing Learning Plan

Week 1: Budgeting & Saving

• Lesson: Where money comes from and how to plan it.
• Activity: Set up their first budget and savings goal tracker.
• Goal: Can split money into different categories.

Week 2: Earning & Interest

• Lesson: Ways to earn and how interest works.
• Activity: Create a mini business idea list + simple interest game.
• Goal: Understand money can make more money.

Week 3: Intro to Investing

• Lesson: Difference between saving and investing.
• Activity: Start a mock investment game with 3–5 companies.
• Goal: Understand that investments can go up and down.

Week 4: Smart Spending & Giving



• Lesson: How to make thoughtful purchases and give back.
• Activity: Review ads together, pick a charity for their Share money.
• Goal: Can make smart spending choices and understand generosity.

Everyday Learning Opportunities

You can reinforce lessons in daily life:

• Shopping trips – Give them a mini budget to spend within limits.
• Family bills – Show them electricity or grocery bills to discuss needs vs. wants.
• Special purchases – Let them contribute part of the cost for bigger items they want.

Tools & Resources for Parents

• Apps: PiggyBot, Bankaroo, Rooster Money
• Books: The Everything Kids’ Money Book by Brette McWhorter Sember, Growing Money by Gail Karlitz
• Games: Monopoly, The Game of Life, Pay Day

Common Pitfalls to Avoid



1. Making it all theoretical – Kids learn best by handling money.
2. Giving too much too quickly – Let them work for some money.
3. Overcomplicating investing – Keep it about ownership and growth for now.
4. Not letting them fail – A “bad buy” can be a great teacher.

Tracking Progress

By age 12, your child should:

✅ Have a basic budget.
✅ Save towards short- and long-term goals.
✅ Understand simple & compound interest.
✅ Know the difference between saving and investing.
✅ Be able to make a basic spending decision.

The Long-Term Payoff

If you follow this plan consistently:



• By age 13–15, they’ll be ready to manage their own bank account.
• They’ll understand risk vs. reward.
• They’ll be prepared to invest small amounts in real markets with your supervision.
• They’ll carry healthy habits into adulthood.