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How to Teach Your Kids About Money

A while back I wrote a blog post...  Should I be Telling My Kids The Truth? In it I discussed a financial problem, my husband and I were having, with our kids. This story sparked so much conversation over the next couple of months about what we should and shouldn't be telling and teaching our kids about money. It got us thinking... Are Other Parents going through this? Are they questioning when to start teaching their kids about money and how to start?

So you know me I did my research. I read a few books and  a few blogs. I talked to some experts and a few Super Moms. I talked to my mama and a few of my friends! They all came had the same answer...  YES!

If you are reading this you can rest assured that you are not alone in wondering how to teach your kids about money and when to start.

I worked together with my village and came up with  9 lessons you can start teaching your kids about money now no matter how old or young they are. (You can start some of these as early as age 3).

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Leading by example is the best way to teach your kids about money and to set them up for a lifetime of financial responsibility and financial freedom. 

It Is NEVER too early to give your kids smart money advice, even small children can grasp ideas like only spending what you have and saving up for something you really want. 

The best way to teach your kids about money in the early years is to take advantage of every learning opportunity that arises in everyday life. Let them help you sort out change at the grocery store, and give them their own money to manage and save.

This post is sponsored by PJ Alford Life Skills Academy Teaching Everything They Didn't Teach You In School

How To Teach Your Kids about Money

Lesson  #1 Don't buy anything unless you can afford to pay CASH for it. 

Of course there are exceptions to the rule but in general this is the way to go! Teach kids to save up for a toy that they want using money they earn doing chores or money that grandma and grandpa give them for birthdays and holidays. 

There's something really satisfying about using your own money to pay for something you really want. This teaches children the value of a dollar, as well as patience.

Check out Dave Ramsey's Financial Peace Junior Kit: Teaching Kids How to Win With Money It's packed with financial advice for kids that is actually fun. It includes some great tools and resources to teach kids about money and investing.

Lesson #2 Don't Borrow Money (USE CREDIT) If You Can't Pay It Back 

My honest tip here is don't borrow money if you can't  pay it back immediately, but the truth is if you could pay it back immediately you probably wouldn't be borrowing it in the first place... Right? 
I am personally teaching my kids not to use credit or loans at all.

The experts and my super mom friends say savvy credit card use and borrowing will allow you to take advantage of perks such as travel rewards, free insurance, and buyer protection programs. I say to hell with that! Teach your kids that loans are the devil! If you can't afford to pay for it with  cash you can't get it you don't need it and it is not worth it! PERIOD! 

Find ways to make the money you need to buy what you want. This will keep them out of debt, stress free and happy for life! 

If you have a teen tween or young adult check out HOW TO MAKE MONEY 101
a course I created to teach the ins and outs of making money, so borrowing and debt never become an issue. 

For those of you with younger kids I found this cute little book to help teach this concept.
It's about a little boy who borrows money from a friend but then can't pay it back.

Lesson #3 Start Saving Early

The earlier children start saving the more money they will have! Have them put away a portion of the money they earn or are given on birthdays and holidays. You can also start teaching them about having an emergency fund  or rainy day fund.  You could have them put their money in a savings account or a piggy bank like this one I found on Amazon 

One Cent Two Cents Old Cent New Cent: All About Money with The Cat In the Hat is a fun book all about kids and money.

Lesson # 4 Teach them About Earning Money

You can teach children as young as 3 about earning money. Managing a business at an early age helps children later in life even if it's just a lemonade stand. 

Ideas for Teaching How to Earn Money
  • Washing Cars
  • Doing Chores around the house for allowance
  • A Yard Sale
  • Babysitting 
  • Lemonade Stand
  • Selling Toys or Gently Used clothing that they've grown out of  to buy new ones
You can get started with younger kids by playing shop using a toy cash register

For Older Kids Teens and Young Adults Be Sure To Check Out How To Make Money 101

Lesson # 5 Don't Try To Beat The Market

Teach your kids about get rich quick schemes. Don't believe anyone who tells you you can beat the market not a stock broker, a friend or a blog post! Pyramid schemes and "sure-thing" investments are the fastest way to lose your hard earned money. 
Wow The Dow is a fun book to teach yourself and your children about investing in the stock market. 

Lesson # 6 How to Manage Money

Kids don't have bills yet but when they get them they need to know how to pay them! A great way to give them the idea of paying a bill is to have them set aside a certain amount of money each month to give to charity. Smart Trio Money Jars can make this a fun activity. 

Lesson #7 Learn To Negotiate

Make Sure your kids know that everything is negotiable! Cars, mattresses, appliances, new homes and anything you are buying with cash can be negotiated. My mom instilled this in me! I watched her go into a large retail chain, a place you would think prices are firm and set in stone, and negotiate the price on a big ticket item down nearly $300.

This is especially important when it comes to salaries! Teach your kids to ask for what they want and need, and to not be afraid to walk away if the deal doesn't benefit them.

Monopoly  is a great way to get your kids started on making deals, as well as buying and selling properties. This edition Monopoly Junior Electronic Banking features an electronic banking unit to give a modern bank feel.

Lesson # 8 It's Not What You Make It's How You Spend it That Counts

This is something my grandpa used to say, and it is likely the most important advice of all. It's easy to increase spending with every pay increase as you go through life, but you don't have to. The easiest way to save money is to spend below your means! Use coupons discounts and rebate apps. Buy the used car with low mileage and save, or opt for the smaller house that fits your needs over the one that impresses all of those people who don't really care about your financial well being. 

Money Bags Coin Value Game is a fun way to teach your children the value of a dollar as they wind their way through the game making money and counting coins.

Lesson # 9 Experiences are Worth Every Penny!

Worrying about money and hoarding every penny is no fun and no way to live life, and children should know that! Teach them to spend money on experiences. Travel and learn new things. Purses and shoes go out of style, but memories of experiences can last a lifetime. 

A great way to teach this lesson is to start giving experiential gifts for holidays instead of toys and things they don't really need. Amusement park tickets, sporting events, and movie passes are a great place to start. 

Take Away : It is important to start teaching your kids about money at an early age so they're not afraid of it, and they don't get lost in it when they're older. A firm foundation is the best foundation! 

Now friends if this was helpful Give So Others Can Live! 
Thank you for your donations!

Here are a few books for parents about Kids And Money that may be helpful in your journey to teaching your kids financial literacy



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