Teaching Your Kids About Money: When to Talk about What? Pt 2


Teaching Your Kids About Money

Last time, we discussed teaching your kids about money and we looked at some good guiding thoughts on how to do it.

To review: Don’t feel intimidated about your past mistakes. Your regrets can make for the BEST jumping-off points when talking to your kids.

You and your spouse have different values regarding money. Indeed, teach them both to help your kids be balanced.

The President’s Advisory Council teaches that by age 5, children should start to know:
1. You need money to buy things.
2. You get money by working.
3. You may need to wait to buy something.
4. There is a difference between what you want and need.

Besides, as you’ll see in this list, all four of these principles are reiterated at different times in different ways depending on your child’s age.

Youngest Children

Show Them

This would be a great time to use cash to let them visualize the transaction. Then teach them that this money comes from work you’ve done. This is also a great age to give your kids a job or two at home where they can earn some money.

Let Them See Progress

I love using a clear jar and not a piggy bank. Your youngest children will enjoy watching coins stack up as they do a job or two.

Don’t Argue in Front of the Kids

This is a good general policy, but especially true for your youngest kids. They are watching and learning all the time.

Elementary Age

Teach Them to Prioritize

If they want nice shoes, they may have to buy pants at Goodwill. They can get 5 used books for the price of 1 new book. This is the beginning of budgeting. Be firm with budgets, so they appreciate the power of prioritizing.

Give Them Opportunities to Earn

When teaching kids about money, the quicker they learn the monetary power of their effort, the better! Replace ‘allowances’ with ‘earning.’ This isn’t to say students shouldn’t be expected to do chores around the house. This discipline teaches the lesson that their sweat and time hold a cash value.

Teach Delayed Gratification

If you want to teach this to your children, you should avoid impulse buys when they are with you. Alternatively, if you make an impulse purchase, then make sure you correlate with something that can’t be enjoyed. “If we get this dress today…you’ll have to wait on the shoes until next month.”

If you think your children are mature enough, this would be the time you teach them about saving so you can take advantage of a ‘sale opportunity.’ “This TV was $500, but mom and dad have been saving for a few months, and now it went down to $450. Because we saved, we can take advantage of this offer.

Be forewarned though, the ‘on sale’ discount is a tricky one. Many people need to know that money spent is NEVER money saved regardless of how deep the discount appears.



Teaching kids to budget should be a constant conversation. But as soon as your teens have a job, budgeting should be topic number one! Help them differ between needs and wants and track everything out on a spreadsheet.

Preparing For College

Now is a great time to teach about saving for college. Accordingly, get them a checking and savings account and start insisting that a part of every check gets saved.

Teaching Kids about Debt

Your teenager is very quickly going to be a target for credit cards. Therefore, this would also be a great time to talk about some of your ‘learning experiences.’ Show them the difference between invested money, where they gain compound interest, and credit card debt where they PAY compound interest.

Some people think all debt is bad debt; others believe that debt can be leveraged for bigger and better things. Student loans are a hot topic right now, with good people disagreeing. In fact, the critical issue is that your children learn how to think about the subject for themselves.

Teach Gratitude and Generosity

Grateful people are undefeatable people. Therefore, if your teenager learns how to be thankful and generous, they will learn the most significant attribute of joy. And THAT will protect their finances for decades to come.

I hope this helps! Don’t hesitate to contact me if I can help make these concepts easier for you or your kids to understand.