Teaching kids about money: How to raise money-smart kids


A few years ago, I polled my Twitter followers to ask: “What did your parents teach you about money? Anything? Did it work?

A lot of folks responded to say that their parents were poor examples:

  • @MoneyMateKate wrote: My parents didn’t teach me — I taught them! I was paying my own dental bills (no insurance) from age 12 onwards with babysitting dollars.
  • @liberryteacher wrote: My parents never had any money, and life was hard. So they taught me by example that that was not a good way to live.
  • @mike_strock wrote: My parents gave me money whenever I asked. Needless to say, that wasn’t helpful later in life. I’m learning!
  • @tcita wrote: My parents taught me absolutely nothing: no chores, allowance, budgeting, spending money, savings — nothing. Though I guess that taught me value of work.

But not all parents fail at training their children about money. Plenty of folks picked up good habits from the Bank of Mom and Dad. Here are some of my favorite anecdotes and tips:

  • Pam from The Turtle Path (a running blog) told me: In junior high, my parents gave me $400 at the beginning of the year (instead of a weekly allowance). They told me I could do whatever I wanted with it, but they weren’t giving me any more money the rest of the year, so don’t ask.
  • @Elle_CM wrote: My mom (and grandma) emphasized always saving a chunk of any income you receive. We used to make Saturday deposits at the bank.
  • Via Facebook, Cynthia wrote: As kids, if we were at the store and saw something we wanted, my dad would say, “Did you bring your money?”
  • @mattwakefield wrote: My dad taught me about the stock market by using a 1/100 scale model of the [stock] market. Got hooked early!
  • @EverydayFinance wrote: My father insisted on no credit-card debt and said, “Everything in moderation.” It worked like a charm.
  • @kingkool68 wrote: My parents printed family checks for my allowance. I could write checks to my parents in first grade! They also gave me monthly statements.

Teaching your children about money is one of the best things you can do to ensure their future success. Financially aware kids become financially aware adults.

How do you teach kids about money — especially if you haven’t yet figured out money for yourself? This is a tough question for me to answer since I have zero experience raising children. That said, I’ve paid close attention to the experiences of my friends and family over the past twenty years. While I don’t have any personal experience with this subject, I’ve observed what has and has not worked for others.

Teaching Kids About Money

The Opposite of Spoiled
The Opposite of Spoiled

Some parents try to shield their kids from the family finances, but this often does more harm than good. From the parents I’ve spoken to, the ones whose kids seem to have the best handle on money are the ones who’ve seen how Mom and Dad deal with money, both the good and the bad. If they see the challenges you face, they can prepare for them in their own lives.

A few years ago, I chatted with New York Times columnist Ron Lieber about his book The Opposite of Spoiled, which is all about “raising kids who are grounded, generous, and smart about money”.

“How do children become spoiled?” I asked.

“They’re not born that way,” he said. “We do it to them. Nobody wants to raise a spoiled child, yet it happens all the time.”

“When we talk about spoiled children,” Lieber told me, “the opposite qualities are modesty, patience, thrift, generosity, perspective, perseverance, courage, grit, bravery, prudence, and so on.”

“The thing is,” he continued, “you can use money as a central tool to teach kids about every single one of these. Instead of shying away from the topic, what if we put money at the center…

Marcela
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Marcela

COO at oneQube
COO @oneqube | Angel Investor | Proud mom | Advisor @TheTutuProject | Let's Go #NYRangers
Marcela
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