• Dave Kinzer

How To Teach Kids About Money

One of the best things you can do to teach your kids about money is free, you can do it anywhere and you can do it any time you want: simply talk to them about it.


If the thought of talking to your children about money scares you, you’re not alone: 41% of parents don’t like to talk to their kids about money, according to T. Rowe Price’s 2021 “Parents, Kids & Money Survey”.


It doesn’t have to be that hard or complicated though. Forget about taxes, 401ks, budgeting, and your salary.


Just talk to them about saving, spending, and giving. Tell them why you spent your money the way you did, why you give money to church and charities, and why you didn’t buy something, even though you liked it.


For example, when shopping with your child, and a tv twice the size of yours catches his eye and he says, “Mom! Look how big that tv is. Let’s buy it!”.



Instead of just spitting out a reply like, “We’re not buying that. C’mon.”, take a second to pause and look at the tv. Talk to your child about what he likes about it and why he thinks you should buy it.


Then lead him in a conversation to explain why you won’t buy it. You’ll likely give him one of the following reasons: the tv you have works just fine, you don’t watch much tv anyway, you don’t have enough money right now to buy it, it’s not in the budget, or you’ve got another big purchase you’re saving up to buy right now instead.


None of those reasons will make him happy of course, but at least you’ve given him a valid reason as to why you won’t buy the tv right now. The more conversations you have like that, the more he will see that you don’t always buy something just because you want it.


Another thing to remember is you can talk to them about money constantly, but if they don’t ever actually have any money of their own, they will never learn how to manage it.


I’ve written before about my preference for kids to earn commissions instead of automatically being given allowances. With a commission, a child has to earn their money by performing simple and age-appropriate tasks around the house.


If your child wants more money, encourage them to figure out other ways to earn it. He could pick up sticks in a neighbor’s yard, mow lawns, shovel driveways, sell produce from your garden, wash cars, etc.


Teach him that work equals money. You want more money? Do more work.


Or you can come up with some creative ways for your kids to earn money. I just read a post on social media by a dad who offered to pay his son one dollar for each chapter book he read that year.


The dad was amused because the son thought he was pulling one over on his old man, while dad said “that was the best $84 I ever spent.”


Be sure not to go overboard on presents at birthdays and Christmas. If a child receives every single thing he wants and more at Christmas, why would he ever save up any money? He won’t because everything he wants will be given to him anyway.


Give him whatever gifts you want, but also deliberately choose to not give him a particular gift he asked for.


If he complains that he didn’t get a certain toy, you can say, “You’ve got some spending money saved up. Do you have enough to buy it?”


If he does, then he gets to make the difficult decision of whether or not he wants to part with his money to get the toy. Whatever choice he makes, it doesn’t matter. Either way, he’ll learn about the pros and cons of saving and spending his own money.


The T. Rowe Price survey revealed 63% of parents said they learned about finances from their parents.


Talking with your kids about any important topic may not be easy or fun, but remember, they are learning about money from you already, just by watching you.


Why not talk to them about it?

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