4 Ways to Teach Your Kids About Money

Tried-and-true strategies to help you feel more confident

By Crystal Paine, founder of moneysavingmom.com, host of The Crystal Paine Show podcast and author of Money-Making Mom and The New York Times best-selling Say Goodbye to Survival Mode.

Sponsored by Regions Bank, Member FDIC. All thoughts are my own.

“When should you start teaching your kids about money?” Because my husband and I are well-known online for helping people save money, we often get this question.

If my husband answers before me, he always says emphatically, “As soon as they are born!”

Now, truth be told, that is a little bit of an exaggeration — we didn’t sit down and talk to our newborns about budgeting. However, it’s not that far off from the truth.

You see, from the time our kids were able to walk, we’ve been talking about the value of money with them. We taught them how to count coins and bills. We discussed budgeting and our financial goals at the dinner table.

As they got older, we took them with us to the grocery store and involved them in helping us find the best deals, look for markdowns, use coupons and get creative in the kitchen. And we gave them opportunities to earn money and pay for their own purchases, before they were even in kindergarten.

So often, I talk to parents who have no idea where to start when it comes to teaching kids about money. They feel ill-equipped and overwhelmed, and they let fear hold them back from beginning to have these highly important conversations.

You don’t have to feel scared anymore! I’ve teamed up with Regions for this article where I will share four of my best tried-and-true strategies to help you feel much more confident when teaching your kids about money.

1. Set a Great Example

Did I just hear you groan? I’m sorry, I know this might step on a few toes, but I gotta start out with the most important secret to raising kids who have great money skills: parents who model a great example of money management for their kids.

Our kids are watching us and learning from our lives. They see when we choose to forgo a purchase until we have money to pay for it. They observe us researching our options and looking for the best deal. They listen when we talk about our budget, compare prices and make sure we have enough money to pay for something.

We can’t expect our kids to pick up good habits if we don’t display it for them on a regular basis. As has wisely been said, “More is caught than taught.”

Now, please note that I didn’t say, “Set a perfect example.” None of us are going to be perfect parents or always make perfect choices. And here’s the beauty in that: When we make mistakes, it gives us fantastic opportunities to go to our kids, talk with them about where we messed up and let them know what we learned from it.

2. Start Teaching Early

Kids are a lot smarter than we give them credit for. Our kids could count change and understand the basic concepts of saving, giving, debt and budgeting by the time they were 5 years old.

If you wait until your kids are teenagers to start talking about money, you’ve missed prime opportunities for teaching. We had our kids handle money as soon as they were old enough not to swallow coins or rip bills. (This was usually around age 3.)

We kept it really simple and just taught the concept of save, spend, give. While they are required to do some chores as being part of our family, if those chores were done, we gave them opportunities to earn money by doing extra chores that could earn them a little bit of money.

This provided an opportunity for them to begin handling money on their own. We let them decide what they wanted to purchase with their money, and then they would go up to the register and pay for their purchase themselves.

Not only does this help them begin to pay attention to prices and learn to compare their different options, it also helps them learn to stick with a budget, because they only could spend the money that they had! It also helped them begin to understand the concept of accounting for taxes when they were calculating to see if they had enough money. 

3. Involve Your Kids as Much as Possible

I talk to many parents who are hesitant to have conversations about their finances with their kids. They worry that they might cause their kids to stress over finances or that they might be giving kids too much information.

While I understand the hesitation, I will say that I think the more you can help your kids understand how the real world works and have honest dialogue with them about your struggles and triumphs, the better prepared they will be to go out into the world someday.

That said, I don’t think you need to tell your kids exactly how much you make or if you are going through a really tight spot financially. But you can bring your kids into discussions about budgeting areas that involve them.

For instance, we traveled to Iceland this past summer as a family. It was a big trip for us and we worked hard to do it on a small budget. From my research beforehand, I discovered that the cost of food in Iceland was really high. In fact, online articles said that this would be one of our biggest expenses.

Because we had gotten such a great deal on flights and lodging, I didn’t want to blow all that savings on food while we were there! So we put on our thinking caps and devised a plan. We decided that we would bring almost all of our own food and then buy fresh food at the discount grocery store when we got there.

We packed a big suitcase full of granola bars, beef jerky, dried fruit, trail mix, etc. and lugged it with us to Iceland. Some people thought we were crazy for doing this, but it was a sacrifice we made in order to stick to our budget and be able to enjoy a very memorable trip.

Yes, we all got tired of eating packaged food, but it was so good for all of us to tangibly remember that it was a small sacrifice to make in order to experience the breathtaking views and incredible sights of such a gorgeous country. (Also, we did find a few local eateries that had some very inexpensive options that we enjoyed, too — all while staying within our budget!)

While some families might think we’re weird, it’s very normal for us to come up with creative and outside-the-box ideas that we implement in order to stick to our budget. It opens the door for many great conversations about the importance of budgeting and the fact that sometimes it's valuable to make short-term sacrifices for long-term benefits.

4. Let Them Make Mistakes

Our three older kids are now 14, 12 and 10, and are all very budget-conscious and cautious about how much they spend. Some of them were not careful in the beginning and would spend their money as soon as they had it in hand, often on things that they regretted within minutes of purchasing.

Instead of reprimanding them for buying something that seemed like an unwise purchase, we’d usually talk to them about it and just ask questions. Our hope is to raise adults, not children. We want them to be able to go out into the world and make good choices. In order to learn how to do that, they may first have to make some bad ones. And I’d rather they make $3 or $30 mistakes to (hopefully) prevent them from making $300 or $3,000 or $30,000 mistakes.

Not all of these four strategies might work for you and your family, but I hope this article has given you some practical food for thought to better teach your kids about money and prepare them well for life!

Crystal started moneysavingmom.com in 2007 to provide practical strategies to help women cut their grocery bills and live on less than they make. It has grown to be one of the top personal finance blogs on the Web, averaging more than 1.5 million unique visitors per month.

In 2017, Crystal started a second blog, yourbloggingmentor.com, to teach beginning to intermediate bloggers how to make a part-time to full-time income blogging. She offers courses and blog coaching at yourblogginguniversity.com.

Crystal has been featured on Good Morning America and FOX Business, been spotlighted in articles in Woman's Day and All You magazines, and has earned nods via The Today Show, National Public Radio, CNN, USA Weekend, Shop Smart and Real Simple magazines and numerous other national outlets.

Her desire is to help women across the globe live with more passion, purpose and intention in their everyday lives. She lives in the Nashville, Tenn., area with her husband and three kids, and has a new baby due in April.

For more practical money-saving tips and great deals, be sure to subscribe to her daily email newsletter.


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