30 Money Terms Every Kid Should Know by Age 12
Your kid doesn’t need a finance degree by middle school. They do need a working vocabulary — the basic words adults use about money — so that when they encounter the concept later, it isn’t foreign.
Here are 30 terms, organized by what to teach roughly when, with definitions written for kids (not their parents).
Use this as a reference. Read a section together. Bring up one term at dinner. You don’t need to teach all 30 at once — you need to teach enough of them that the rest become obvious.
The basics (ages 6–8)
1. Money
Anything people use to trade for the stuff they need or want. It used to be shells and metal coins. Now it’s mostly numbers in a computer.
2. Cash
The paper bills and metal coins you can hold. Most money in the world isn’t cash anymore.
3. Allowance
Money you get on a regular schedule — usually weekly — from your parents.
4. Earn
To get money in exchange for doing work. Cleaning the bathroom for $2 means you earned $2.
5. Spend
To trade your money for something you want. Once you spend it, it’s gone.
6. Save
To keep your money so you can use it later for something bigger.
7. Give
To use your money to help someone else — a person, a charity, an animal shelter — instead of buying something for yourself.
8. Goal
The thing you’re saving for. Goals make saving feel less like waiting and more like getting closer.
9. Cost
How much money something is. The cost of a candy bar is $2. The cost of a bike is $200.
10. Worth
How valuable something is to you. A $20 toy and a $20 book cost the same, but they might be worth different amounts to different kids.
Earning and tracking (ages 8–10)
11. Income
Money coming in. Your income is your allowance plus anything else you earn or get as a gift.
12. Budget
A plan for how to use your money before you spend it. “I have $10. I’ll save $5, spend $4, give $1.”
13. Track
To write down (or watch) where your money goes. Without tracking, money disappears and nobody can say where.
14. Bank
A business that holds money for people and keeps it safe. Adults put their money in a bank instead of carrying it around.
15. Account
A record at a bank that keeps track of one person’s money. You have your money in your account; your friend has theirs in their account.
16. Balance
The total amount of money you have right now. If you save $5 a week for four weeks, your balance is $20.
17. Deposit
Adding money into an account.
18. Withdraw
Taking money out of an account.
19. Interest
A little extra money the bank pays you for keeping your money there. It’s small, but it adds up over time.
20. Receipt
A piece of paper (or email) that proves you bought something. Useful if you need to return it or remember what you spent.
Bigger ideas (ages 10–12)
21. Salary
Money someone earns from their job, usually paid every two weeks or every month. Adults’ main income is usually their salary.
22. Taxes
A part of every adult’s income that goes to the government. Taxes pay for roads, schools, police, and lots of other things.
23. Credit
When you buy something now and promise to pay later. Credit cards work this way. If you don’t pay it back, you get charged extra.
24. Debt
Money you owe someone else. Borrowing $20 from a friend means you have $20 of debt until you pay them back.
25. Loan
A specific amount of money borrowed, usually with a plan to pay it back in pieces over time. Mortgages, car loans, and student loans all work this way.
26. Compound interest
When the interest on your savings starts earning interest too. Save $100 with 10% interest: after year one you have $110. After year two you have $121 — not $120 — because the new interest earned interest. This is how money grows over long periods.
27. Investing
Using money to try to make more money over time, usually by buying small pieces of companies (stocks) or other things that grow in value.
28. Inflation
When stuff gets more expensive over time. A candy bar that cost $0.50 thirty years ago might cost $2.00 today. Same candy bar, more money needed.
29. Subscription
Money you pay every month or year to keep using something — like Netflix or Spotify. Subscriptions are sneaky because they keep charging even when you forget about them.
30. Impulse buy
Buying something on the spot without thinking it through. Stores and apps are designed to trigger impulse buys. The fix: wait 24 hours and see if you still want it. (For more on this, see Help Your Kid See Through Ads and Stop Impulse Buying.)
How to teach these without it feeling like school
Don’t run this like a worksheet. Instead:
- Use the terms in real situations. “That subscription was an impulse buy.” “What’s the cost vs. the worth?” Kids learn vocabulary by hearing it used, not by being quizzed.
- One word a week, casually. Pick a term. Bring it up at dinner. Move on.
- Let them ask first. A kid who hears “compound interest” on a podcast and asks what it means is more ready to learn it than the same kid getting a forced lesson.
- Use the save / spend / give system. Half these terms come up naturally when you’re running an allowance — budget, balance, deposit, goal, withdraw, save, spend, give.
By age 13, the goal isn’t a teenager who can define “compound interest” on a quiz. It’s a teenager who’s heard the word enough times that when their first job offers them a retirement plan with employer matching, they at least know what to Google.