7 Ways To Teach Your Kids About Money


A couple of weeks ago, I had the rare opportunity to spend some one on one time with my oldest son. He is 8. You would think that me being in the financial services industry, I would talk to my kids constantly about money. Well, I don’t. We have some conceptual conversations here and there, but we don’t really talk about money the way we should. Well, that all changed two weeks ago.

As my son and I sat in the car talking, he asked “Dad, how much money do you have?” I paused for a moment and then replied with the approximate dollar amount of my portfolio. My son’s eyes lit up and he said “Wow, that’s a lot of money”! Now, you may be saying to yourself, why on Earth would you tell your child how much money you have? The answer to that is I wasn’t completely certain at the time. However, the conversation went further. “Dad, how did you save that much money”? I replied, “Son, I saved that money little by little and I invested in the market, so I could earn a return which would help my money grow”. He says “How”? At that moment, we were sitting in the car outside of Wal-Mart. I had the perfect opportunity to show him. I said, “Son, what is Wal-Mart”? He responds, “A store to buy things”. I said, “Yes, and that store sells items made by other companies”. You can take your money and give it to Wal-Mart, Wal-Mart then takes your money and tries to make more money with it. “Does that make sense, Son”? “Kind-of, How does Wal-Mart make more money”? “Wal-Mart buys products at a discounted price, then they increase the price, sell it to you and basically that’s how they make money”. “So, do you think Wal-Mart would be a good place to invest your money” I asked.  “I don’t know”, said my Son. “Ok, Son. Tell me, do you like watching the Disney channel?” “Yes”. “Do you think the Disney channel will be around for a while”? “Yes”. “And, what about Disney World? Do you think people will continue to want to go to Disney World”? “Oh Yes, definitely”, said Zj. “Well, do you think Disney would be a good company for you to invest some of your money”? “Yes”. Our conversation continued to talk about companies that made toys, food, toilet paper and more. This conversation had me thinking about how people talk to their kids about money. So, I thought I’d share my thoughts.

Somewhere along the line, we were taught that talking about our money was taboo. We were taught it’s even worse to tell your kids about your money. The other day I had a choice to make. I could be transparent with my son and share how much money I have or I could have skated around the subject. The fact that I shared the truth allowed my son to ask me more questions, which helped me talk about money in a way he could understand. This of course came with a disclaimer to my son that he can’t tell anyone how much money we have, including his little brother who can’t keep a secret to save his life. If you tell the little one something and say “don’t say anything”, he literally looks like he’s going to explode with excitement to tell someone. We can all utilize different means of talking to our children about money. Just because this was a good approach for me, doesn’t mean it is the best one for you. However, there are some universal concepts that we need to begin to embrace with our children.

Without further ado here are the seven ways to teach your children about money

1) Money is a tool:

Money shouldn’t be used to manipulate people or show your success. You have money so that you can Live, Give, & Enjoy. You should balance how you live, with what you give and what you enjoy. If there is a balance in these three areas, then you will be content.

2) Give 10%.


Teach your children to give 10% of everything they earn before they do anything else with their money. Some people may say “why on Earth would you give 10% before anything else?” The answer is because we are taught to do this in the Bible. We are taught to give of the first fruits of what we receive. Giving before you spend helps you guard your heart against the love of money. Even successful people who aren’t believers of the Bible utilize this concept when giving money.

3) Save 10-20%.


Kids love to buy things with the money they earn. If you don’t take the time to show them how to save the money, they will spend every dime before you blink. Set up a bank account at your local credit union so your child can experience going to the bank to deposit their funds.

4) Enjoy what you’ve earned.


After you’ve saved and given, It’s ok to buy something nice for yourself or for someone else. If you save every penny of what you earn you will not be a very happy person and people probably won’t want to be around you.  Getting an ice cream or a Spider-Man action figure is ok if you’ve already set some money aside.

5) Start a business.


This could be as simple as setting up a lemon-aide stand for a young child or as complex as trading bit-coin on the computer for your teenager. The point is that you should teach your child to learn how to create wealth rather than just getting a job to work for someone else. While it is important to teach kids the value of work, I’d rather teach mine how to work for themselves.

6) Take your kid to sit in a meeting with your financial advisor.

If you prepare your advisor ahead of time, she will know what she can and can’t say in front of your son. Having your child sit and listen in on a conversation about money from the professional shows your child that the advice of a professional is useful. Your child also realizes meeting with a financial advisor is common and normal. You also set the stage that you don’t have all the right answers and even you need to surround yourself with wise counsel to make good decisions.

7) Set a spending budget for your children.

This one comes from me watching a friend give his debit card to his son the other day. His son wanted to buy something from the coffee shop. Dad handed him his debit card and said “your limit is $10”. His son is 11. This one act does so much, but I’ll focus on a couple of things. One, the child knows he can’t spend more than the budget Dad set. This idea naturally implants the idea of limits being put on spending. Dad could have said, here go by what you want, but having a set limit helps his son make good choices while at the store. The #2 thing this example shows is how much trust you can build with your child with this simple act. By giving that debit card, Dad said without using words “I trust you. Make a good choice”. His son will benefit from that for years to come.

I hope you’ve enjoyed these 7 tips.

Leave a comment with your thoughts.

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If you’d like to learn more about how we help you “Plan with Purpose”. Please visit our website at www.highfivefinancial.com or call us at 847-290-0753.

Jose Cuevas


One thought on “7 Ways To Teach Your Kids About Money

  1. Anonymous Comment Left Via Email: We tried to live frugally. We taught our kids to work, share and save.

    Since we had less “things” than many of their friend’s families they must have assumed we were “poor”.

    I remember our daughter confidently filling out her financial aid form for college assuming she would get assistance. When we had to report some of our assets she was startled to find out we had money.

    Then she found out that the money she had saved was also a big factor!

    She was almost angry that she worked and saved and then had to pay for college while some of her friends that hadn’t worked and saved got assistance.

    At college she learned how financially irresponsible some of her classmates were and realized the value of what she had been taught even though it disqualified her from financial aid.

    The only loan she has ever had is for her house and she is paying that off ahead of schedule – has never paid interest on a credit card – puts a significant part of her salary in retirement savings and budgets so she can live on the rest.

    She lives comfortably, has a nice car and takes vacations.

    Doubt the same can be said for some of her classmates.

    This was sent to support your message about teaching children about money. It is not meant to be a brag letter about our daughter.

    It is too late when parents wait until their children have student loans, car payments, and credit card debt.


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