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Teaching a 4-Year-Old Good Money Habits: Spend, Save, Share, Invest

Kid's Banks

By Matt Crisafulli.

We recently celebrated my daughter’s 4th birthday and I think she is finally at the age where she can begin to understand the concept of money, and what it should (and shouldn’t) be used for. For her birthday, while her grandparents got her the toys she REALLY wanted, I went the practical route and got her these “piggy” banks and a couple of children’s books on being smart with your money.

The concepts of “Spend, Save, Share, and Invest” are difficult for a 4 year old to understand, but I basically tried to explain the four options in terms I thought would make sense to her.

  • Spend – “Put money in here to use to buy small toys you want that don’t cost a lot.”
  • Save – “Put money in here over time to buy one big toy after a lot of money has built up.”
  • Share – “Put money in here to share with your sister or with someone who doesn’t have as much as you have.”
  • Invest – “Put money in here and let it grow into even more money…don’t worry, dad will help you with this one.”

Did she get it? Definitely not. These concepts are difficult for adults to understand and execute, so I do not expect her to get it right away. However, when I gave her 4 coins, she did put one in each of the 4 banks.  So by default, she ended up saving in all 4 categories all on her own and that is good enough for me…for now.


Matt Crisafulli, EA, CFP® is a Partner at ACap Asset Management as well as a UCLA Alumnus. He is a Fee-Only CERTIFIED FINANCIAL PLANNER ™ and an Enrolled Agent licensed by the IRS.

ACap Asset Management, Inc. is a “Fee-Only” investment management firm headquartered in Los Angeles, CA specializing in helping doctors and healthcare professionals make sound financial decisions.

Contact ACap at info@acapam.com or 818-272-8511.