How to Teach Kids About Money

“Kids WANT to learn! And the best way to teach them is to include them in the family’s finances”

At what age did you start to learn about money?

Specifically how to spend it, how to save it, and most importantly, how to grow it? Was it when you stuffed your piggy bank with loose change or birthday money from Aunt Beth? Or maybe when you began doing chores and cashed out that $50 allowance? Was it when you landed your first job and felt like you were making a million bucks? Or perhaps you have never learned and you’re still trying to figure it out. Most of us, including myself, have uttered those magical words, “I wish I knew this sooner.” But the reality is that the majority of us were never taught about money. It wasn’t one of those dinner table conversations and our parents never talked about it (well at least not verbally - but we definitely picked up on those subtle cues when the bills were due or money was tight at the end of the month).

There are far too many families who don’t know how to have a conversation with their kids about money because they were never part of those conversations themselves while growing up. But you can change that. To be honest, I feel WE MUST change that. Maybe our parents didn’t teach us, but we can be the ones to teach our kids and forever change the financial literacy of our future generations. But it starts with…

Doing the learning yourself - managing your money is a learned skill which anyone can learn, including you.
Changing the mindset that money is a taboo topic and “too adult” for kids - kids are eager to learn everything, so why not teach them about money before they have to learn the hard way.
Including your kids in the family’s finances - teach them through everyday examples, talk to them about money and show them how to treat and respect money.

Finances are a family affair and whether you realize it or not, your kids have already picked up and learned some of your money stories and money habits. So let’s ensure you only teach them good ones from now on.

Here are 3 fun ways to begin teaching kids about money so that you can raise financially confident little humans and change the financial literacy of your future generations:

Just start

How do you talk to your kids about money? You just start. It’s like ripping off a bandaid, there’s going to be some discomfort at the beginning, but I promise it won’t be as painful as the birds and the bees talk. I’m not here to give you advice on that one - so good luck! Starting the conversation about money doesn’t have to be boring and one sided. For instance, you can “talk” to your kids about the importance of saving by including them in a family savings goal. Let’s say you are planning a family vacation - explain to your kids that the family has to save up for this trip and have your kids participate in updating the goal each month as you contribute into your savings account. You could have them draw a thermometer and colour it in each time money is deposited. This not only teaches them how to save but also how to be financially responsible instead of growing up with the mindset of “I see it, I want it, I got it… with my credit card.” It also teaches them to allocate money towards goals they want to achieve and to have the patience to work towards them.

“We live in this society where we’re constantly giving to our kids and not teaching them how life and finances work - we’ve created within them, a sense of self-entitlement.”

— Vanessa Bowen

Open a chequing account for your kids - that THEY are involved in

What’s the point of opening a chequing account for your child if you’re the one managing it?!

One of my clients shared inside the Unblock Abundance coaching program how when she started working at 16 years old, her parents started collecting every paycheck. She never knew how much she was making and when it was time for her to move out, her parents used the collected money to purchase furniture for her new apartment. She was never allowed to make a single decision about saving her money or even allocating what she had earned. Creating a checking account but not having your child involved isn’t going to teach them anything. In fact, it will do the opposite and make them feel like they can’t trust themselves with money.

If you want to teach your kids how to be financially responsible, allow them to “manage” their own money. Here’s how…

Open a chequing account for them and have them deposit any birthday money, allowances, etc. into their account. This teaches them that money received must first have a home before it can be spent. You can also make this a double teaching moment by agreeing together how much of each dollar deposited will go into a separate savings account. You can create a rule that 20% of the amount gets transferred to a savings account and the remaining 80% stays in the chequing account to be spent as they wish. This teaches them a fundamental financial principle that most adults fail to follow: Pay Yourself First!

The money remaining in their chequing account is now theirs to spend. If they want to purchase something like a new toy, they use their own card and pay for it out of their own account. They get to “manage” how their money is spent and deal with any consequences when there’s no money left. All while Mommy & Daddy’s account remains happily untouched. This creates healthy spending habits and allows them to actually see how their spending decisions impact their bank balance. They also learn that sometimes you can’t have it all and they will grow up to be more intentional with their spending.

Have a family money date

I dare you to turn your next family game night into a family money date night! Actually, I double dare you!! If you want to raise financially confident little humans and make talking about money the norm in your house, including your kids in your weekly money date is the perfect place to start.

I cannot stress enough the importance of having a money date. It’s a weekly check-in to see how your money is doing. It helps create financial stability and allows you to understand where you are in your spending compared to what you’ve allocated in your budget. It’s a time to check in on your financial goals and adjust your plan as necessary. You can involve your kids by giving them a few budget categories to add up and compare based on what was supposed to be spent and what has currently been spent so far. They’ll get a better understanding of how the family financial goals are being met and maybe flip the switch and hold you accountable at the grocery store when you’re eyeing something in the bakery section that isn’t on the list. Kids don’t need to know every last detail of your budget and honestly, including them in your mortgage numbers will probably put them to sleep. But if you involve them in things that excite them, they’ll be more willing to get involved.

I’ve also had clients tie a goal to the family budget. For instance, at the beginning of the month you can set a goal as a family that says “If we stick to the budget this month we can go to the movies at the end of the month.” Make sure the reward is exciting to your kids and also make sure you have the money set aside for it in your budget. When you’re out shopping and your child asks for that toy or candy that is not in the budget, you can easily remind them of the family goal. They’ll be more willing to let that purchase go without a fight and you don’t have to keep finding new ways to say “No.” You're happy, your child is happy and most importantly your bank account is happy!

There are so many ways that you can teach your kids about money. Select a few from this blog and get started! It all begins with these small steps which create big financial change not just for your kids but for you as well. In teaching your kids about money, you also begin to be more financially responsible and aware. Imagine your kids having a financial trajectory based on the knowledge you instilled in them early on. Kids want to learn, yes, even about money.

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