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As a parent, there are many things we try to teach our kids. Being financially responsible has got to be one of them. In the current world we live in there are too many teenager and those in their early 20’s who are floundering on financial topics. One of the greatest responsibilities you have is to teaching kids about money.
Young children seem to think that money just appears. This is mostly due to their innocence and lack of understanding. Middle school aged kids are starting to grasp the concepts but still sometimes struggle with delayed gratification. High school aged children typically have the knowledge but sometimes lack the ability to understand broader money concepts. All this can sometimes be overwhelming as a parent when you want to teach your kids about money.
Here are 5 Financial Rules you can use when teaching kids about money.
- Needs Vs Wants
- Money isn’t FREE
- Earn Before you Spend
- Allow Kids to Make Mistakes
- Teach them to budget
Needs Vs. Wants
As a parent this is a constant battle. When you are talking about money it’s your job to make sure you children know the difference. Wanting something because it looks good is not the same as needing food to eat.
Make sure when you are teaching kids about money, you stress the importance of needs, and telling them wants can wait.
Money isn’t FREE
Money is associated with work. If you don’t work, you can’t have money. That doesn’t mean your kids should always be rewarded with money, however, you can ensure they work towards their goals.
Setting up
Earn Before you Spend
Teaching kids they can purchase something and then earn money sets them up for a life of borrowing. This is troublesoe, so instead make sure you are teaching your kids about money and earning it prior to spending.
Allow Kids to Make Mistakes
Everyone makes mistakes. We are not immune to this, neither are our children. Make sure you let them make mistakes and make them into opportunities they can learn from.
Teach them to Budget
Financial understanding is so important and a budget is a big part of this. Letting your children be in charge of what they are getting for money and where it is spent is so important.
This makes them invested in finding ways to earn more when something is important to them. Most significantly it makes them accountable for purchasing the items they want.
Teaching Kids about Money
Teaching your children about money isn’t easy and it’s not going to happen overnight. But with persistence, ground rules and smart strategies you can help set your children up for success.


Teaching kids about money management is so important! When I was a kid, the only thing I learned about money was “we never have enough” and life was always a struggle.
I have a five year old daughter who is just starting to grasp some of the concepts of money. She understands that money isn’t free (though that was a pretty recent revelation for her, before that she just said “well go to the bank and get more then!” if I said I didn’t have money to pay for something at the time). But my favorite story…
She received about $20 total from family members for her birthday last May. During the summer, she stole a book from a summer camp we went to. I gave her the options of either taking the book back, or going to the bank and using her money to get a cashiers check to send the camp for the value of the book. She chose to send a check. So we went to the bank, got the check, sent it, and all was well, until the next week when we were at the farmers market and she spotted a vendor that made hand carved animals out of wood. She only had about $4 left, which wasn’t enough to purchase anything. And the poor kiddo looks at me, so sad, and says “I wish I never stole that book, Mom.” It was a hard lesson for her, and it was hard for me to not give in and buy the item she wanted, but we both survived and she hasn’t even attempted to steal anything since then!
I am so glad to hear you are teaching your daughter how to manage money. Thank you so much for sharing!