How to Teach Kids About Money

Financial Wisdom for Children

“Money is nothing more than a resource, and money management is nothing more than a tool to use that resource.”

– Judy & Ron Blue
Raising Money-Smart Kids

Train up a child in the way he should go, even when he is old he will not depart from it.

Proverbs 22:6

Financial literacy starts at home.

In 2022, only 23 states required a personal finance class for high school graduation, placing the burden of financial education primarily on parents.¹

Teaching children about money can be daunting if you don’t feel financially savvy yourself. We want to help equip you to help your children build a strong financial foundation and set them on a path to lifelong financial contentment.

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To dive into these lessons further & learn how to teach them to your children, review the checklists below.

Checklists for teaching money lessons

Ever wonder what lessons to teach and when? View our checklists below for some key lessons to share with children based on their age and stage of life.

Young Children Tweens & Teens Young Adults

Teaching Children to Earn, Give, Save, and Spend Wisely

One study found that only 24% of Millennials― those born between the early 1980s and the mid-1990s―demonstrate basic financial knowledge, and an alarming 81% of them already have at least one long-term debt on their books.²

We want to equip you to teach your children financial wisdom by focusing on four main areas: Earning, giving, saving, and spending.

Earn Give Save Spend

Earn

Earning assets is the beginning of all financial management. Young children’s income may come from allowances or gifts, but as they grow, it will come from chores or jobs.

It is important for children to learn where money comes from. It doesn’t grow on a tree in the yard or magically appear in adults’ banking accounts. Instead, money is earned from work. God created us to work (Ecclesiastes 5:18-19). Work is good and gives us fulfillment and the ability to support ourselves. It is also important to model this belief for children through our own actions and attitudes toward work.

Give

We all want to raise children who are generous. Here are practical tips to teach them the importance of giving.

Explain the reasons for giving:

Acknowledges God’s ownership and provision in our lives. Deuteronomy 8:16-18
Demonstrates obedience to God’s command to be generous and ready to share. 1 Timothy 6:17-19
Prioritizes life issues and breaks the power of money on our lives. Luke 12:33-34
Tangibly meets the needs of others. Matthew 25:35-36

Help your kids donate a portion of their earnings, outgrown clothes, or unused toys to a local church or charity. Emulate living generously by giving freely and often.

Save

Whether saving for a specific goal or building a financial cushion, children should understand that having savings provides options and helps protect them from the dangers of debt.

To set them on the right path, encourage children to save 10% or more of their allowance or income. Discuss whether they want to save for a specific item, gift, or experience or simply build savings for future needs or wants.

Consider matching their savings if they are working toward a certain goal (i.e., car, electronic, camping equipment, etc.).

Spend

The Bible doesn’t specify spending levels or lifestyle choices, but our purchasing habits affect our ability to avoid debt, give generously, and follow God’s guidance.

Two essential concepts for children to master are delayed gratification and tradeoffs. Learning to be patient, rational, and resist impulse-buying helps us make wiser choices. Many people (young and old) struggle with debt because they do not wait and save for what they want.

Most of the time, we can’t have everything we want at once. We must learn that there are limited resources for unlimited options and make choices. Understanding tradeoffs and learning how to assess them enables us to make informed decisions, leading to wiser allocation of our limited resources.

Guiding Principles When Teaching Kids About Money

Effective financial training requires commitment, patience, and faith. It’s a long-term process involving time, effort, and sometimes money. Approach it prayerfully, model the principles for your children, and let them practice, even fail, in a safe environment. Skills are strengthened through repeated practice. Consider these five teaching principles.

Encourage Experiences

The best way to learn is through experience. While we can tell children about money, it only becomes meaningful when they experience the joy of giving, the rewards of saving, and the satisfaction of spending wisely. Provide opportunities for hands-on practice. For example, allowing older children to borrow money and manage debt under parental supervision can be a powerful learning experience.

Allow Failure

Mistakes and frustration are part of life. The issue is not whether children will fail but how they will respond when they do. Learning and competency are the goals, not perfection. Failure should be treated as a positive learning experience. The best time for kids to fail is when they are young and parents are available to counsel them.

Provide Feedback

Children need the opportunity to make choices within clearly defined boundaries. As parents, it’s important to decide in advance what values we want to teach them—morally, socially, financially, and spiritually. When providing feedback, parents should use the opportunity to discuss, guide, and teach. Praise their successes and offer encouragement, and if they make mistakes, calmly explore alternative choices and their potential outcomes.

Model Behavior

Where and how we spend money is often a reflection of where and how our parents spent money. The same can be said for our children. We do not have to say anything to our children to pass down our financial priorities, commitments, and habits. Children tend to emulate or reject modeled behavior, so consistent, good money management and early, ongoing financial education are crucial for raising financially responsible individuals.

Give Rewards

Rewards are motivational and provide another source of feedback and incentive. They can come in many forms, including treats, activities, praise, money, etc. When children are rewarded for good decision-making, they feel competent and encouraged to continue making wise choices.

Discover More Resources for Kids

¹ www.councilforeconed.org/policy-advocacy/survey-of-the-states/

² www.wsj.com/public/resources/documents/pwc.pdf

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**All financials are as of 6/30/24 and subject to change.

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