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Practical Tips for Teaching Your Kids About Money

Where did you learn about finances growing up? School? Probably not. Finance classes in high school are rarely required to teach financial literacy. In college, unless you pursued a degree in finances or a field related to finances, then you didn’t get this education. The reality is, formal education does not teach kids about money. The majority of us learned about finances from what we grew up around in our homes. 

Unfortunately, a lot of times at home we didn’t get explicitly taught financial literacy by our parents. If we did it was something like, “Make sure you get good grades so you can go to college and get a higher paying job”. We heard, if you didn’t work you didn’t get paid. This narrative is instilled in most people their entire childhood and really adulthood. 

It is extremely important that we, as parents, recognize the majority of what our children will learn about finances will come from us. This also means the responsibility is in our hands to really know what we are doing and talking about regarding money. I highly recommend the books Rich Dad, Poor Dad and Smart Money Smart Kids. These will help you shape your own money mindset and financial literacy, and enable you to pass that on to your children.

What are your goals in teaching your kids about money?

First things first, you need to have a goal in teaching your kids about money. For example, one goal I have for my kids is to teach them about how money works so they don’t enter into their marriage with a bunch of debt. It is natural for someone to be a spender or a saver by nature. I want my kids to recognize which one they are and understand how to have self-control around that. This is important so they don’t get their family into a bad situation because they can’t control their spending. Or if they are more of a saver, then I want my kids to learn to be generous with their money.

I also want them to understand they might marry someone who is the opposite of them, and that is okay. Being a spender or saver by nature is not inherently wrong, but it is important to have awareness around these tendencies and impulses so they can keep each other or themselves in check.

I also want my children to pursue their passion, regardless of the annual salary it may yield. Most millionaires actually make less than $100k each year. It’s not about making millions to be a millionaire, it’s about how you handle the money you DO have. I want my kids to feel confident to pursue their passions and feel comfortable in that because they are financially literate. I want them to understand how to make their money work for them and what it looks like to live below their means.

Benefits of Passive Income

Additionally, I want to teach my kids how to create passive income. This way it really doesn’t matter how much money they make for doing something they love. I am going to teach them how to invest their income from their job into assets that make them money. This is helpful for so many reasons. For example, passive income may enable their partner to stay home and raise their children because their family’s income won't be limited to their day job.

Practical Ways to Teach Our Kids About Money

kids about money

Give commission, not allowance

The only way that kids will learn about money is if they have some. Unless your child is 15 years old, they can’t really get a normal job that has a consistent income. So give commission. 

In our house, we pay our kids for doing chores around the house. Now, for those of you who think, “Um, no. They clean their room because they live here and are a part of this family.” Absolutely. I’m with you on that. We have chores where you just do it because you are a part of this family and need to contribute, and then we have other chores where the kids can earn money for doing them. These may be more involved or specialty type chores. Though you can start as young as 3, I really feel like, at least for our family, 7 has been the perfect age for this.

Give your child 3 mason jars & label them Give, Save, and Spend

This teaches your kids there are three things you can do with money. The ‘Give’ jar goes along with their tithe. The ‘Spend’ jar is for something small at the store, and then the ‘Save’ is for any bigger type of expense. Consistency is definitely key. When your kids earn a commission or are gifted money by a relative for a holiday, talk with them about which jar they will put what amount into.

Play Money Games

Money games are a great way to teach not only your kids, but also yourself, about money and decisions. For your kids, I would recommend Financial Peace Jr., which has a lot of great resources for learning about money. Monopoly can also be a good game to teach them how to work with money as they get a little older. 

For adults, I highly recommend a game called, “Cash Flow” that was created by the author “Rich Dad, Poor Dad.” It is free to play online and teaches you how to be smart with your assets and cashflow your expenses. This game really drives the point home that it doesn’t matter what your monthly income is, if you can figure out how to invest in a way that you can generate enough cashflow to cover your expenses, then you can seriously set yourself up for generational wealth.

Let them join in on the conversation

When I sit down to do our bills, I explain to my kids things costs money. For example the house, groceries, their sports, etc. all cost money. If they see me scrolling Amazon, I will say, “look this is something mommy really wants but I’m not going to get it.” When they ask me, “why?” Then I can say, “it’s just not in the budget right now,” or, “I really want it but I don’t really need it.” 

Also, let them see some mistakes you make with money. We’ve said in front of them, “wow that was a bad choice to get that,” or, “we spent too much on….XYZ.” The goal is that they learn from us. I’d rather my kids learn from my mistakes than their own. 

I want my boys to be confident when it comes to finances, not scared of it. See your life and finances as an adult as a hands-on finance school for your children.

Additional Money Lessons We Plan to Teach Our Kids

  1. Use cash only, no credit cards
  2. Dave Ramsey’s 7 steps
  3. How to create a zero budget
  4. To live below their means
  5. Gratitude, so they are thankful for what they do have
  6. To ask themselves if they can afford something they want, NOT to ask themselves if they can afford the payment
  7. Steer them as far away from student loans as humanly possible
  8. How to invest 
  9. What cashflow looks like and can mean for them
  10. To be generous 

I hope that through all of our efforts our children leave our home with a solid foundation. As their parents, we will continue to teach them even into their adult years everything we are still learning about money, just like my parents are doing for me.

Get Started Today

If you’re reading this and thinking, “I don’t know what the heck I’m doing with money ." Or, "I don’t feel confident to teach my kids about money,” I encourage you to binge financial content. Go to my podcast directory and listen to every episode under the Finances topic. I also encourage you to download my free step-by-step checklist to help get your mind in the right place and your debt organized so you are ready to take the first step into financial freedom. 

The first way to combat being afraid to even lean into your finances is to start familiarizing yourself with finances. Other people’s stories have the power to pull you out of the cave we tend to hide in where we pretend everything is fine and we are just doing what everyone else is doing. Nope. There is a different way and it is so life-giving.

I invite you along for the ride. It can be grueling in the moment to flip that switch but once you get some momentum and you start to see the glimpse of a different type of life, nothing can stop you. It’s a game changer, and this is where the chains of generational financial hardship break. Never again will your family be in this situation of living paycheck to paycheck or being buried in debt because now that you know better, you do better, and you teach better. Your family's legacy will be forever changed. 

I hope you came away from this blog with some practical ideas on how to teach your kids about money, and also some inspiration for getting your own financial situation and money mindset in line. If you want to listen to the podcast version of this episode, click here. As always, I’d love to connect with you on Instagram where I regularly share more content just like this that will enable you to create positive changes for your family.

P.S. I have a BRAND NEW free class called, "Money Mindset for Moms 101: Learn to Break Generational Cycles" that I would love to share with you. Grab your FREE seat, here.



About the author, Stephanie

My name is Stephanie and I am a mom of 4 boys (ages 8, 6, 5, 2 + one on the way). My husband, Justin, and I met when I was 16 years old and have been together for 16 years now. We are also foster parents so we welcome the chaos! I have been a Special Education teacher for 7 years and still love to teach but I have chosen to pivot and focus on raising my boys and pouring my heart into this business now!

I'm so honored you are here and I promise to serve you by being prepared and present during this process together of learning to leave the legacy we want to leave through our motherhood.

"Let us not become weary in doing good, for at the proper time we will reap a harvest if we do not give up." -Galatians 6:9

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