Teaching Kids About Money

​As my children get older, they are beginning to ask more about the cost of things. They are interested in the latest fashions and trends. They want what their friends have, and are not shy to ask for it.

With my eldest daughter in middle school, she is becoming more and more aware of what other girls her age are wearing. Brand-named clothes. Certain ways to wear her clothes.

To be clear, my husband and I have never felt the need to buy certain brands for the sake of just having them. We have always talked with our kids about shopping smart, and looking for good quality instead of the name on the tag. We are always comparing prices in the grocery store, or figuring out whether sales are in fact good deals. And figuring out how best to spend our money.

Experts agree that teaching kids about money and the value of the dollar needs to begin at a very early age. As early as we start to teach our children their manners.

Children as young as four years old can be taught the concept of saving.

Slightly older children can witness us paying the bills, calculating what something is going to cost whether at a grocery store or a restaurant, and discuss with our partners (in simplistic terms for the sake of our children’s understanding) how the money earned that month is going to get divided.

It is imperative that as our children grow, they learn to understand the financial impact of our economy and understand that saving for a rainy day is a necessity, not a choice.

If parents do not talk to their children about money, someone else will. It is inevitable that our children are going to learn about money and spending. Just like they will discuss sex and school and their hobbies with their friends, they are also likely to discuss, compare and learn the value of the dollar from their friends.

Ideally, wouldn’t most parents prefer this learning to come from them? So what are parents supposed to do? Where, if at all, should they draw the line when it comes to discussing money matters with their children?


Is it appropriate for our children to know what our hourly rate is at work in order to gain an accurate understanding of how much we need to work to be able to afford the clothes they wear or the food we put for them on the table?

There are no right answers to these questions. But the following list can help guide us in how me talk to our children about money matters.


Dos and Don’ts for Teaching Kids about Money:

1. Don’t lie to your children. If there is stress in the house around finances, your children will feel it. Allow them to trust that you will be honest with them. This will better enable them to be honest and come to you when they need you.
2. Do reassure your children that you will be able to provide them with all that they need.
3. Do try to teach your children how to earn money so they can buy items that they want.
4. Do set the expectations at home as to what chores need to get done. Do reward these chores with an allowance. Pay it on time, and in cash. This is a very concrete way to teach your children that if the task is done, they will earn that which they expect. Providing children with an earned allowance is really the basis of teaching them about budgeting.
5. Do admit when you have made some money mistakes in your life. Parents are often so eager to come across as flawless to their children. But the truth is, your children need to see you as human beings, who make mistakes, and hopefully learn from them.
6. Do discuss money in concrete terms. Most kids have trouble grasping the abstract concept of money. For instance, explain how earning less money will affect them in day-to-day terms. Perhaps earning less money will result in eating in restaurants less, or the likelihood that there will be no family vacation this year.
7. Don’t go shopping without a list. Parents can teach their children to focus and not go overboard by only buying what they need, not what entices them.
8. Do remind your children of everything they already have. It is often easy to forget how blessed we are. Our children need reminding too. Help them clean out their closets to show them what they do already have and how little material items they in fact need.

Talking about money is not easy for parents to do. It is a touchy subject, which needs to be handled with sensitivity. Regardless, I am a true believer in being honest with our children. Children are smart. They understand a lot of what is going on around them and they absorb information that they hear.

As long as we, as parents, continue to communicate with them, guide them and ensure they are being taught at their own developmental level, our children will grow up feeling respected and understood and develop a proper understanding of how money gets earned and how money should be spent. And if they do not, they could always ask.