Feb. 3, 2021

4 Ways To Teach Kids About Money

Why It’s Important

Why is it up to us to teach kids about money? Kids are not taught about money in school. My kids are 15 and 13 at the time writing this post. I can remember maybe 2 or 3 assignments they have had where money was the subject. They have never had a class dedicated to money. Simultaneously, the news coverage is dominated by stories about student loan debt, lack of retirement savings, and most recently, Millenial Robinhood investors. There is a clear disconnect between the importance of money in our lives and our schools’ lack of financial education.

#1: Talk Openly About Money

Kids hear everything we say. They are little sponges. You don’t have to be talking to them or even know that they are around; they hear you. In many homes, the only time kids hear about money is when there is a problem. Mom and dad are arguing or fighting over money issues. Maybe there is a job loss, the mortgage can’t be paid, or the utilities just got shut off. It would make sense then that most kids grow up negatively viewing money, a source of stress.

One of the best ways to teach kids about money and how to have a healthy relationship with money is to talk openly about money, good and bad. Discuss salary, budgeting, saving, investing, net worth, money mistakes, and debt in front of them. The more sides of money they hear about and see, the healthier their view of money will be. Celebrate the wins and learn together from the fails. When making money decisions, include them in the process you go through to understand all the variables involved. Discuss your investing/savings approach and how/when you choose to spend money. Talk about budgets and why you do or don’t use one.

In my experience with this, I have found that kids are way more interested in how money works than they are about eating healthy or doing well in school. Money is something that kids can relate to. It’s often clouded in mystery, but we can change that by talking openly about money with our kids.

#2: Lead By Example

If you have shitty money habits, so will your kids. Duh! This one should seem obvious. There are some cases where kids will be traumatized by the parents’ failures and vow to make better choices, but most kids grow up to have money habits like their parents. If you want to teach kids about money, it starts with being good with your won money.

Good money habits start at home. Save more money than you make and invest the rest. Good habits will start here and grow. Your kids will see and hear those habits and adopt make them their own. While you are at it, try and demonstrate good health, food, exercise, sleep, and work habits. You might as well!

As discussed in the first section, we all make mistakes, and it is healthy to discuss these mistakes as a family openly. Our kids need to see that we are willing to embrace failure and learn from it. As much as our kids can learn from our good habits, they can learn even more from our mistakes and see our work towards fixing those mistakes and replacing them with better choices and habits.

#3: Make It Fun

We all like fun, especially kids. Today’s kids don’t do well with boring speeches and lectures about money. I learned that the hard way. I have learned to try and reach them where they are. Here are some of the tools I have used to teach my kids about money and make it fun:


Meeting them where they are means the internet for most kids. There are many platforms. YouTube seems pretty universal. Just about every kid spends some time each day watching videos on YouTube. They even watch videos of other kids watching videos or playing video games. So weird!

YouTube has something for everyone. When I want to have a money discussion or class with my kids, I send them a video to watch. I try and make it short and animated as those see to grab their attention the best. When we meet to have our discussion, we start by talking about the video and what they learned from it. The video does the teaching, and all I have to do is facilitate the discussion and ensure understanding of the basic concepts. I try and end the conversation quickly and before I lose their focus. This, of course, is different for every kid, depending on age and focus.

Grocery Store Challenge

This was really fun for my boys and me. The challenge was that each of my sons would be given a set amount of money to go grocery shopping for the week. They could only eat the food they bought and no food already in the house during that week. They had to make their money and food last for 7 full days.

To determine the budget, we used the $2 per meal per person rule of thumb as a guide. Because they could not necessarily buy things at the best unit cost, we decided to go to $3 per person per meal. A 7 day week has 21 meals (not including snacks), so we gave them each $70 to account for meals and snacks. Before starting the challenge, they were each given a one-week warning to think about their meals and create a grocery list to work from when they got to the store. Both took it seriously and prepared for the challenge.

With $70 in hand, they were off to the store. One parent was assigned to each kid. Their job was to teach and answer questions. They were not allowed to persuade or help in any other way. We discussed and taught them about the science behind grocery store layouts, marketing, and labels. The most valuable lesson was understanding the difference between the cost per item and cost per unit. At one point, they even agreed to buy and split ground beef so that they could bet the best price per unit. They planned to take half and make cheap hamburgers and use the other half for tacos. What a proud parenting moment that was! They both completed their shopping list, plus a few add-ons, and came in just under budget.

The following week was a resounding success. They easily had enough food for all of their meals and snacks. They actually ended with a significant surplus. What they actually ate was probably pretty close to the $2 per meal original guideline. I think they enjoyed each meal more because they planned and paid for it. Overall, the challenge was a great way to teach them a lot of money and life lessons while also having fun.

Own a Company

My boys both own a business. Well, kind of. They each own a piece of a business. How? By investing! I did a little research and learned that I could open custodial brokerage accounts in each of their names. These accounts are in their name but owned by me until they turn 18, at which point they take complete ownership of the account. Inside of these accounts, they can buy and sell stocks, bonds, ETF’s, mutual funds, Bitcoin, and other investments that any brokerage sells.

At the time of this blog post, they own VOO, BXP, GOEV, and VZ. They are responsible for deciding when and what to buy and sell. As a bonus, they work with my father on learning the math and science behind making a good trade. Extra time with the grandparents is always a good thing!

We have been doing this for a few months now, and the lessons learned have been great. They have bought and sold numerous times, and they have both made money. I have been able to teach them the difference between short and long-term investing along with the value and potential downside of both. They have learned about capital gains taxes, short sales, short squeezes, market crashes, and market trends. Most importantly, they learn how to put their money to work and have some fun.

#4: Give Them Access

How can we expect kids to learn about money without giving them access to their own money that can spend, save, invest, and lose? An equivalent to that would be asking them to learn how to ride a bike without ever getting on a bike to try, fail, and succeed. It would not and does not make any sense. To teach kids about money, they need to use money.

There are many ways to go about giving kids access to their own money. I remember having a little bank book when I was a kid and later on a debit card. To accomplish this in our house, I utilize a company called Greenlight. Greenlight allows me to give each kid a Mastercard debit/credit card attached to their own accounts. Each account has three categories: spend, save, and give. As the kids deposit money, they choose where it will go. Greenlight gives you the option to pay the kids interest in their savings to encourage saving, which I do. I included the link to Greenlight above to go there to see all of the features. It is very comprehensive and customizable.

Our approach is simple. Any money the kids receive from gifts, work, allowance, and/or chores goes into the account category of their choice. They are responsible for keeping and not losing their own debit cards. They also need to remember to bring their cards with them when they are out. If they want to buy anything above and beyond what we would normally buy (i.e., snacks, more expensive shoes, etc…), they can use their cards and buy it. Our only requirement is that they are intentional and make sure they avoid impulse buying.

The Next Lessons

My boys’ next few money milestones will be employment, driving, and college. I plan to use these milestones to continue their financial education in creative ways. We will talk about Roth IRA’s when they start having earned income. My current thought for their first cars will be for my wife and me to buy the car, and they will lease it from us (new post on that soon). College is a big one. I question the cost vs. return of college. We will explore options like junior college and more as we get closer (also, another post on that as we do it). There is a lot of learning and teaching in the coming years for our family as we continue to teach our kids about money.

Thoughts From the Community

We would love to hear from you! Please leave your comments in the section below. How do you teach your kids about money?

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