When to Start & What It Looks Like at Each Age

Honest, age-banded guidance for 3–5, 6–8 and 9–12. Concrete and sensory at the start; entrepreneurial and compounding by the end.

Ages 3-5Ages 6-8Ages 9-12 ~10 min

Runtime: ~8 minutes

The honest answer to “are they old enough?”

The honest answer is: if they can grasp that one object can be exchanged for another, they’re old enough.

That’s usually around 3. Some kids get it earlier. A few not until closer to 4. You’ll know — they’ll start asking “how much does that cost?” or pretending to “buy” things in play.

If you’re starting late — your kid is 8, 9, 10 and you haven’t done any of this — you haven’t missed the window. You’ve missed the easiest part of the window. Start anyway. The system in this course works from 3 to 18; the difference between starting at 4 and starting at 10 is mostly that the 10-year-old has more existing habits to overwrite.

Now let me show you what the system actually looks like at three different ages, because the same five pillars look very different at 4 than they do at 11.

How many Banks at each age

Before the age-by-age walk-through, one question comes up a lot: how many Banks do you set up at each age? Here’s the short answer:

  • Ages 3–5 — three Banks (Save, Spend, Give). Keep it simple. Add Invest later.
  • Ages 6–8 — three or four. Most families open the Invest Bank in this window, usually around 7. The trigger is usually: “the concept of money that makes money has clicked.”
  • Ages 9–12 — four Banks. If you haven’t opened Invest by now, do it. This is the age compound interest starts to feel real (see Lesson 10).

The Lil Banks app doesn’t care how old your kid is. It doesn’t gate features by birthday and it doesn’t ask. Every family starts at three Banks; you open the fourth Bank when you decide your kid is ready. In Our Money Rules → Advanced, “Open the Invest Bank” is one checkbox and it’s reversible.

The age bands below are recommendations, not prescriptions. You know your kid.

Ages 3–5: The Concrete Years

At this age, money has to be physical. Coins they can hold. Notes they can crumple. Banks they can see filling up. If the money is invisible, it doesn’t exist to them yet.

What pocket money looks like:

  • $1 to $3 a week, in coins, ideally with some variety (a few dollar coins, some 50c and 20c pieces)
  • Paid on the same day every week, with a small ritual — sit at the table, count it out together, divide into Banks
  • Three physical Banks (or a three-compartment piggy bank) labelled SPEND, SAVE, GIVE. Add INVEST as a fourth compartment when you’re ready — see Lesson 10 for the trigger.
  • The Earn concept is introduced through small “extra” jobs — not Weekly Tasks, but contributions (“help me wash the car and I’ll give you a 20c piece to add”)

What the lessons look like:

  • Counting out the allocation together each week (“one for Spend, one for Save, one for Give, one for Invest — and let’s add the parent-match”)
  • Letting them spend their Spend Bank at the shops without comment, even on rubbish
  • Saving toward one tiny goal, like a $5 toy car, over 3–4 weeks
  • A monthly “Give day” — pick a charity, hand over the coins, talk about where they go
  • A monthly “Invest match day” — you double whatever’s in the Invest Bank (you’ll stop doing this at 100% match around age 6)

What you’re trying to install:

  • Money is real and limited (a coin given away can’t be used for something else)
  • There are different purposes for money, not just one
  • Saving means a specific thing arrives later
  • Money in the Invest Bank grows by magic — and Mum/Dad’s match is the magic

What you’re not trying to install yet:

  • Compound interest (too abstract; just plant the “Invest grows” idea)
  • Long-term thinking past about a month
  • Anything digital

Common pitfall: Parents at this age often over-explain. A 4-year-old doesn’t need a lecture on opportunity cost. They need to count coins into Banks while you smile and stay quiet.

Ages 6–8: The Planning Years

This is the sweet spot. At 6, 7, 8 they have enough cognitive horsepower to plan ahead, hold a goal in their head for weeks, and start to understand that money in a bank account is still real even though you can’t see it.

What pocket money looks like:

  • $4 to $8 a week, still mostly in cash but starting to introduce digital
  • A real Save Bank plus their first bank account or kids’ debit card (in Australia, something like Spriggy or CommBank Youthsaver; in the US, Greenlight or GoHenry; in the UK, GoHenry or NatWest Rooster)
  • The Invest pillar moves into something semi-real — a custodial micro-investment account, or even just a parent-tracked spreadsheet showing how a notional $50 grows at, say, 8% a year
  • Earning becomes more deliberate — a base allowance plus commissions for above-and-beyond jobs

What the lessons look like:

  • Saving toward bigger goals — $40 for a Lego set, $60 for a scooter — over months, not weeks
  • The first compound interest demo (Lesson 10 covers this in detail)
  • Reading the bank balance together, every month, on the same day
  • The first earning experiment — a lemonade stand, selling artwork, washing the car
  • Discussions about “wants vs needs” — this is the age where they can finally hold this distinction (the Cambridge research specifically noted under-8s often can’t)
  • Mistakes and the “no rescue” rule — if they spend their Spend Bank on something dumb, you don’t refill it; if they break the thing, you don’t replace it

What you’re trying to install:

  • Plans for money beyond this week
  • The first taste of compound growth
  • The link between work and reward
  • Distinguishing wants from needs
  • Self-rescue from money mistakes

What you’re not yet pushing hard:

  • Stocks vs bonds, asset allocation, anything that needs algebra
  • Anything that requires understanding percentages confidently (some 8-year-olds are there; some aren’t)

Common pitfall: Parents bailing kids out at this age. They blow their Spend Bank, they want the thing, you cave. Every cave teaches them that the system doesn’t really apply to them. Hold the line.

Ages 9–12: The Wealth-Building Years

By 9 or 10, your kid is ready to operate the system as a near-adult. They can hold goals over many months. They can do percentages. They can understand abstractions like “the stock market” without you having to make a metaphor about magic beans.

What pocket money looks like:

  • $10 to $20 a week, mostly digital — a kids’ debit card, an app showing the four pillars as separate balances
  • A real investment account in their name (custodial in most jurisdictions). Small amounts, but real. They can see the holdings, watch them go up and down, ask questions
  • Earning has shifted from Weekly Tasks to value creation — they’re running something, however small (Marketplace flips, neighbourhood services, simple online products)
  • Give has expanded to causes they choose and can explain

What the lessons look like:

  • The full compound interest math, with a calculator and their own real numbers
  • A conversation about why you can’t “time the market” and why long-term beats short-term
  • The first investing decision — should we put this in a broad index fund, or pick a few companies?
  • Earning experiments that have real revenue, real expenses, and real profit-and-loss
  • A money meeting once a month — sit down, look at all the balances, talk through what’s happening, plan the next month
  • Introduction to inflation — why $100 today buys less than $100 ten years ago, and why money that just sits is actually losing value

What you’re trying to install:

  • Compound interest as a felt thing, not just a math concept
  • The investor’s mindset: patience, long-term thinking, ignoring noise
  • Entrepreneurial thinking — “I can create income, not just receive it”
  • Understanding of where money lives (bank accounts, investments, super)
  • Money as a tool, not a moral test

What you’re starting to hand over:

  • Decision authority. By 11 or 12, they should be making most of the call on their own money, including the Invest Bank. You’re a sounding board, not the manager.

Common pitfall: Parents at this age over-control. They can’t help managing the Invest account because they think the kid will mess it up. The whole point is they get to mess it up while the stakes are low. A 10-year-old who loses $30 on a bad investment learns more than a 30-year-old who loses $30,000 on the same bad investment.

What if I have kids in different age bands?

Each kid runs their own system. Same five pillars, age-appropriate version, separate Banks and accounts.

The harder version of this question is “what if my younger kid sees my older kid getting more money?” — and yes, they will, and yes, they will complain.

The answer is something like: “yep, when you’re nine you’ll get nine-year-old money. Right now you’re five and you get five-year-old money. Different ages, different amounts. Same system.” Said calmly, repeatedly, without apology, until it’s just a fact of life like bedtimes being different.

What’s coming

Next lesson — how much. The actual dollar amounts, the formulas, and why $5 used well beats $20 used badly.

Action for this lesson: Look at your child and write down which band they’re in, and one specific thing from that band’s “what you’re trying to install” list that’s your top priority for the first month.

— Bec

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