Kids and Money: Which Financial Lessons Parents Should Teach?

Today we’ll look at how you can teach your kids to be financially savvy!
Teaching Your Kids About Money
One of our responsibilities as parents is to teach our kids essential skills they need and finances is part of that.
Good or bad, if you look at how you handle finances, you’ll probably see the impact your own parents had on you.
Our example is a crucial part of teaching them, but we also need to consider those conversations we have with our kids.
What lessons are passing on to them? How can we guide them to not just be financially savvy, but also thoughtful with how they use their money?
It’s something we talk about from time to time. Our two daughters are now ten and seven. They’ve had their allowance for a few years and overall they’re getting the hang of it.
Now we’re trying to figure out how to approach other financial topics like budgets and investing in a way that’s engaging to them.
Thankfully there’s some really good resources out there that can make those conversations easier.
In this episode, we’ll get into:
- Creating a flexible game plan of topics and when you want to introduce them to your kids
- Discuss some of the big questions parents have about allowances
- How to introduce them to the family budget
There's a lot to cover, so let’s get started!
Resources to Teach Your Kids about Money
If you're looking for ideas and resources to prepare your kids to be money-savvy, here are some to check out!
- Best Budget and Money Apps: Personal Capital, Tiller, Mint
- Grab Your Copy: Jumpstart Your Marriage and Your Money
- How to Teach Your Kids About Money (w/o Being Boring!)
- The Opposite of Spoiled: Teaching Kids about Money (and More)
- Cash Crunch Junior: Have fun while learning about money with this board game!
- FamZoo
- Goalsetter
If you want to chat some more about creating better money habits, questions, or share your own tips please join us over at Thriving Families on Facebook.
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Establish Your Goals and Gameplan
One common hangup parents have with introducing finances to kids is that they focus on the numbers.
I get it. That’s the part we see, right? When you’re balancing a budget, watching your investments, and saving up for something, you’re reviewing the numbers.
You may want to jump into a super basic budget and teach them not to overspend their allowance, but for most kids, that’s not going to get them on board.
Actually one of the first things to do is step back from the numbers and discuss the lens of how we manage their money – your family’s values.
Once you take care of the essentials like food, housing, and clothes, where are you spending your money and why? What matters most to your family?
Having that reflection will help you be able to explain to your kids why the budget looks a particular way. Maybe you love to travel and so that’s where you spend your money. Maybe you’re foodies.
When you understand those priorities and values, you can then show your kids that money can be used beyond a basic budget. It also gives you a leg up on finding a way to introduce money on their level.
Introduce money from their perspective.
One of the best ways we’ve found talking to our girls about finances is by tying it to something they love and are interested in.
Our very first conversations about a budget was actually over snacks.
When our oldest was three going on four, she would ask for us to buy this, that, and every snack. We decided to give her a snack budget for the week. She had $5 she could spend. We’d show her the prices and compare how much she could get of them.
Very basic, but it was at a level she understood and it was something she cared about.
Now our girls are into games, animation, and art supplies so when we discuss savings, it’s tied to those.
Find something they love and start teaching with that as an example. Is there a summer program that they would love to join? Are they looking to get a game system? Upgrade their phone, laptop?
You can teach the foundational pieces of finances through that lens.
Play games.
Another way you can begin having those conversations is with games. No, I'm not talking about monopoly. I’ve yet to play a game of monopoly with a group of friends and we are all still happy in the end.
There are some fantastic ones out there, some of them specifically designed to open up conversations about money and give them a bit of practice. Cash Crunch Junior is one of those games.
They pick up helpful skills like tracking their money, saving, and thinking before spending their cash. It’s also fast moving so
The idea is to talk about principles of money in a relaxed setting while having some fun. Not only are they passing on a lesson, but also conveying money talks doesn't have to be boring or stressful.

How Allowances Help Kids
Let’s talk about one of the most common questions I get when it comes to teaching kids about money – allowances.
- When should we start?
- How much is enough?
- Should they be tied to chores?
All good questions and things we’ve discussed and continue to adjust as our girls grow up.
In The Opposite of Spoiled, – which you should definitely read when you have the chance – Lieber discusses how allowances can be a powerful tool in helping kids use money as a reflection of positive values including generosity and entrepreneurship.
When Do You Start An Allowance?
Experts suggest starting an allowance around the time they start kindergarten, but you have a clearer idea on what your child can handle.
This is also a good time if you haven’t already, to open a savings account for them.
How Much Should their Allowances Be?
As you might guess, there is a wide range of what families are doing with allowances.
In terms of how much to pay, when I was digging around, I found that a weekly allowance is typically around 50 cents – $1 per year of their age.
If you have a 6-year old, you're paying $3- 6/week. If you have a 10 year old, it’s around $5-10/week. Of course tailor it to your kids, but the idea is that you give enough so if they’re saving up for a purchase, they can get it in a reasonable time.
Should We Tie Our Kids’ Allowance to Chores?
There are several ways you can go with your allowance and chores. The popular options include:
- Allowances are tied to all of your kid's chores.
- Allowances are separate from your kid's chores.
- The final is a hybrid where there are some core chores that are required regardless of allowance and other chores where kids can earn some extra money.
They all have pros and cons, depending on your kids.
Right now their allowances are not tied to chores. We're a family and to keep things manageable, all of us have to contribute.
We expect the essentials (tidying up their room, taking care of our cat, and weekly clean-ups) to be done regardless if they get an allowance or not.
If they skip out on their chores (and we expect it will happen), then we'll take away a privilege, like tablet time.
Now we do have some extra chores that do offer extra money. Those tend to be seasonal work like prepping the garden for planting or raking leaves in the fall.
Should We Include Our Kids in the Family Budget?
We’re now at the stage where our girls have a pretty good understanding of saving and can do a really basic budget for their goals.
What we are discussing now is being more transparent with them, particularly our oldest about our family budget.
It’s important to us to have her feel comfortable with budgeting when she’s an adult. We also want her to have a clear idea of what it actually takes to keep things running.
Taking our own advice, we’re going to introduce a game. I’m giving each of them a sheet with three expenses we have:
- Our mortgage
- Groceries
- Our last family getaway
Here's wat they came up with:

Looks like we have some work to do.
Going forward, I’ll let them know the average monthly budget and keep them in the loop if we have any special expenses coming up.
By easing them into it, we’re hoping it makes me feel more comfortable asking about the numbers.
Handy Tools to Teach Kids About Money
Now if you’re looking for tools that can help you and your kids manage money they are some great ones out there. Two of my favorites are Goalsetter and FamZoo.
We use FamZoo as a way to easily manage allowances so it divides it up automatically into spen, save, and share goals.There’s so much more you can do. You can set it up to have your kids Parent-Paid Interest on their savings, reimbursements of family expenses, also loans.
Goalsetter is another wonderful tool for families. As the name suggests, you can create a goal and work together on saving up for it. As an added bonus, friends and family can chip in.
I think both of these are fantastic options for families looking to work together on their goals and get their kids more financially savvy.
Key Takeaways
Before we wrap up I focus on a few key takeaways I picked up as I was working on this episode.
- Focus on values over numbers.
- Your example and conversations are important.
- Incentivize good behavior.
I know we just scratched the surface, so if you want to discuss this more. Come join us in our private Facebook group over at Thriving Families.
It’s free and fun! We’re going to swap ideas and stories about our kids and how we’re helping them.
Just head over to simplifyandenjoy.com/fb. We’d love to see you there!
Photo by Pragyan Bezbaruah from Pexels.
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