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Teach Your Kids about Money Management with These 5 Tips

By HERWriter
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Teaching Your Kids about Money Management: 5 Tips Lev Dolgachov/PhotoSpin

Teaching your kids about money involves more than just letting them watch you face palm as you growl at the calculator and the pile of bills on your desk. Don't leave them at age 16 or 17 to discover the pitfalls of credit versus cash after they've received their first credit card.

Healthy spending and money management habits need to start much earlier if children are going to understand how to handle their money properly and respect the consequences of not doing so.

This concept has become even more important with apps, smartphones and debit machines all within easy reach. They make it easier than ever for kids to be separated from their money at the first hint of the latest video game, gadget or activity.

So, here are a few tips to help your kids establish good money habits.

1) Be a Role Model

As with everything else in life, your children are looking to you to set the standards by which they live, particularly how you handle your money.

What do you spend it on? How do you come to decide what to buy at the grocery store? Do you buy the biggest and greatest TV, but a month later grumble at the bill?

It’s so important to teach our children how to use cash, to keep them out of the bondage of the debt cycle, and to be responsible about what are needs and what are wants. They learn all these things from watching you — and, believe me, they’re watching everything you do and don’t do.

2) Make them Earn It

So many parents make the mistake of giving their children everything they ever ask for. Unfortunately, this can turn into a sense of entitlement rather than of responsibility.

Kids don’t learn to appreciate something unless they’ve had to do something to earn it. When they’ve invested their time and money into something they’ve really wanted, they also learn a sense of accomplishment and empowerment.

They become familiar with the ache that comes when they’ve spent their money on one thing only to discover something else they want more a day later.

Children need to feel these emotions and grow accustomed to the idea that money really doesn’t grow on trees. Having it requires work and dedication, and it can be gone in a flash, so it needs to be treated with respect.

3) Good Behavior Does not Equal Money

Don’t give your children money for doing things that are basically expected of them. The danger of offering money every time your child cleans her room means that she won’t do it until and unless you’re willing to pay her. This does not instill a sense of responsibility and contributing to betterment of the household.

4) Learn to Budget with Birthday Money

Something as simple as helping your child decide when and how to spend AND SAVE his birthday money is a good way to help him learn money management.

Remember, successful money management isn’t about spending, spending, spending. It’s about making sure your money gets used for the things you need to live. It requires control and the discipline of a budget. This is where many adults fail and it’s extremely difficult to retrain a person’s brain from a spending to managing.

5) Open a Savings Account

When your child is old enough, open a savings account for her. This should be done as part of her budget. Let her put her birthday or any other gift monies and allowances in her bank account.

With all the electronic means of paying for something, children need to learn about the trap of debit and credit cards. These things make spending so much easier than in years past and it’s so difficult for kids to learn the discipline needed to not spend money.

He needs to be able to see his bank account rise and fall every time he earns a little bit and then spends it. Then you can talk to him about his spending and saving habits and help him decide what’s important to save for, and when it’s okay to splurge a little.

The economic crisis of the last few years should be a sign to all of us that we need to prepare our children in the area of budgeting and money management. The only way they can avoid the catastrophe that we have found ourselves in is by teaching them the discipline and respect of earning and managing their money.

It’s so much easier now to have access to money, which makes it even easier for kids to give in to impulses and buy it now rather than decide waiting to earn the money.

But for the sake of our financial future as families and as a nation, our kids need to learn to avoid the same financial pitfalls we have fallen into, and that means that we must get proactive about teaching our kids what to do with their money.


1. Take Charge America Offers Tips for Teaching Kids about Money. Finance.Yahoo.com. Web. Accessed: Jan 25, 2015.

2. What your child should know about money by key ages. By Williams, Geoff. Finance.yahoo.com. Web. Accessed: Jan 25, 2015.

3. 10 Interactive Financial Websites That Teach Kids Money Management Skills. By Basu, Saikat. MakeUseOf.com. Web. Accessed: Jan 25, 2015.

Reviewed January 26, 2015
by Michele Blacksberg RN
Edited by Jody Smith

Add a Comment2 Comments


I love #4.  Wish I'd done that with my kids. 

January 27, 2015 - 4:03pm
EmpowHER Guest

I am happy to this helpful article. I think every mother or percents tech there children about earn money beside there study. But adult person also earn money from another way. I have awesome methods.

January 27, 2015 - 8:32am
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We value and respect our HERWriters' experiences, but everyone is different. Many of our writers are speaking from personal experience, and what's worked for them may not work for you. Their articles are not a substitute for medical advice, although we hope you can gain knowledge from their insight.


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