Money-Smart Kids: Lessons That Last

Imagine if college was the first time you had to:

• Get a job
• Manage your own expenses
• Use a bank account
• Handle a credit card

For many, that’s the reality—just when financial mistakes become the most costly. Mistakes are part of learning, but wouldn’t you rather your child make a $5 mistake at age 5 than a $5,000 mistake at 20? Small financial missteps early on can prevent costly ones later.

Everyday Opportunities to Teach Money Lessons

Kids naturally ask money-related questions:

• “Can I buy that candy?”
• “Why don’t we have a bigger house?”
• “Can I have this toy with the never-ending battery?”

Most responses are reactive—like playing financial whack-a-mole—with answers like:

• “None of your business.”
• “Because I said so.”
• “We can’t afford that.”

Instead, try responses that encourage financial understanding:

• “That’s not what we’re spending money on today.”
• “That’s not part of our Mindful Spending Plan.” (And explain what that means when the time is right.)
• “We’ve decided to prioritize X over this.”
• “No.” (Sometimes, that’s enough.)

Just as we teach kids about healthy food and relationships, we should also guide them in developing a healthy relationship with money.

Three Ways to Teach Kids About Money

1. Modeling – Show them how you manage money in everyday life.
2. Discussion – Have open conversations about financial choices.
3. Experiential Learning – Give them hands-on opportunities to practice.

Age-Appropriate Money Activities

Little Kids:

Let them watch you pay a bill online. Explain what it covers, then let them click “Pay Now.” Celebrate the moment—it builds positive associations with financial responsibility.

School-Age Kids:

Involve them in small purchases, like grocery shopping.

Let them plan a family dinner out with a set budget, ensuring they have enough to cover tax and tip.

Tweens:

Get their input on larger purchases that affect them, like a car or home project.

Discuss hidden costs like insurance and maintenance.

Teenagers:

Give them responsibility for planning part of a family trip, then gradually the entire trip within a budget.

Involve them in major financial decisions, teaching them long-term thinking.

The Money Messages You’re Sending

Your actions and words shape your child’s financial mindset. If you avoid money discussions, stress about finances, or argue about spending, they’ll absorb those patterns.

What messages are you sending?

• “Money equals stress.”
• “We always find a way to make it work.”
• “There’s never enough money.”
• “We prioritize education.”
• “We don’t ask for help.”
• “We can enjoy life without spending a lot.”
• “Debt is just a part of life.”
• “It’s our responsibility to be charitable.”

What messages do you want to send?

• “Money is something we talk about openly.”
• “We spend on what we value and cut costs on what we don’t.”
• “We control our money, so it doesn’t control us.”
• “It’s okay to ask questions about money.”
• “Investing is the key to long-term wealth.”

Teaching kids about money takes time and intention. But by modeling smart financial behavior, encouraging discussions, and giving them hands-on experience, you can equip them with skills that will last a lifetime.

Resources: Ramit Sethi’s Money for Couples (2024)

Parent Socialization Financial Therapy webinar (2023)