How To Teach Kids About Money
As a parent, I believe one of the most important lessons I can give my kids is how to manage money responsibly. It’s a skill that will help them throughout their lives, and I want to start early. Here’s the approach I plan to take to teach them financial literacy:
1. Earning Money Through Chores
The first step is creating opportunities for my kids to earn money. I will make a list of extra chores they can do to make some cash. These are not their everyday responsibilities like cleaning their rooms or helping with family tasks—those chores are part of being in a family. Instead, the paid chores will be additional work that goes beyond their regular duties. Whether it's helping to clean the garage, organizing a closet, or taking care of yard work, I want to help them see the connection between effort and earning.
2. Allow Them to Choose How to Spend It
Once they earn their money, I’m going to let them decide how to spend it. Some families may take a percentage for “household taxes” or encourage giving a portion to charity, which can be valuable practices later on. However, I want my kids to feel ownership over what they've earned and not feel like they're being forced to part with it. If they want to buy toys, ice cream, or save up for something special, that choice is theirs.
The key lesson here is that they will experience the consequences of their spending choices. If they spend all their money on a toy and then want something else, they’ll have to wait and work to earn more. It’s important that they understand the concept of trade-offs and how to budget their own wants. I’m not going to buy everything they ask for; they will need to make decisions about what’s truly worth spending their money on.
3. Transparency About Money
Lastly, I want to be open with my kids about how money works in our household. Of course, I won’t be teaching my 2-year-old about the stock market, but I do want to have age-appropriate conversations about the cost of things. I'll talk about how much groceries cost, how we budget for fun activities, and the work required to afford our lifestyle. By being transparent, my kids will gain a clearer understanding of what “adult money” looks like and how they should approach financial decisions when they’re older.
Ultimately, I believe teaching kids about money early on will prepare them to make better financial decisions in the future. By giving them the freedom to earn, spend, and learn from their choices, I hope to raise financially confident and responsible adults.
