Teach Your Kids About Money

It is so critically important for kids to have a sound platform of financial knowledge. Their knowledge of money (or lack of) will impact their spouse, their own children, their mental health, and their entire future. It can also affect you. Many parents are still being asked by their adult children for financial support because their kids never learned and internalized financial education and responsibility. That is why I want to help you learn how to teach your kids about money. 

YOU have the primary responsibility for teaching your kids about money. 

Who taught you how to manage money? 

Think about this question for a moment. 

In my own life, I completed kindergarten through high school without taking one class about money management. I then went to college for four years and received a bachelor degree without having one class focused on personal finances. I then went on to graduate school for another three years and received a masters degree – still without a single class about money management. 

When you add it up, it is 13 years of k-12 plus four years of undergraduate study plus three years of graduate study. That is 20 years of formal education without a class on how to manage money. Of course, I learned skill sets that enabled me to earn a lot of money, but I had no knowledge of what to do with it. I did find that I was really good at one money skill set: spending it. 

So from who and how should we learn about money management? 

Most of us obtain our financial education primarily from marketers and our parents. For better or worse, this is who educates us about money. 

There were great things I learned from my parents, these include: 

  • The value of hard work 
  • Work = Get Paid; Don’t Work = Don’t Get Paid 
  • Compound interest is my friend if I am not paying on debt. 

There were also some not-so-great things about money I learned from marketers, such as: 

  • If you want it now, go ahead and get it. 
  • I’ll always have a car payment. 
  • The use of debt can really help me win financially. 

The bottom line is this: If we do not educate our children about money, who will? If we abdicate the responsibility to educate our children and we mismanage money ourselves, it should be no surprise when our children make stupid financial decisions and show up asking for our help to bail them out. 

How have your parents influenced the way you manage money? 


Walk the Talk 


“Do as I say. Not as I do.” 

I have hated that statement since the first time I heard it. A five-year-old child can see right through this statement. A mental note is made that “Mom does not even believe what she is telling me. That means whatever she just said is not very important.” 

If you are a parent, you know you have been trapped before by this. I remember when we told my oldest daughter (when she was around the age of three) that the word “hate” was not a very good word and she should not use it. Of course, the dreadful moment arrived (probably 25 minutes later) when I said, “I HATE the stupid Colts. They can’t win the big game.” 

Instantly, my daughter delivers the convicting statement: “Dad! You just said a bad word!” 

Wow. It doesn’t get any worse than that. I just hate it when that happens. (Pun intended.) 

When it comes to personal finances, you have got to walk the talk. Model the way. Demonstrate and educate the steps you are taking to win with money. Share the challenges you are facing. 

Here is how Jenn and I are “walking the talk” to teach our kids about money. 

  • We prepare a written budget every single month.  Every. Single. Month.  

Teachable Moment:  You must have a plan before spending any money.  (Luke 14:28-30 is a great verse about planning) 

  • We utilize cash envelopes for the “impulsive” categories such as groceries, dining out, spending money, entertainment, and clothing. Our children clearly understand that money is a limited commodity and when it is gone, well, it’s gone!  

Teachable Moment: Self-discipline goes a long way toward ensuring success with money.  

  • We invest money every single month into our retirement plan (SIMPLE IRA for us – may be a 401(k), 403(b), 457, IRA, or Roth IRA for you) and 529 College Savings Plan. We actually show our children the 529 College Savings Plan statement every quarter. I remember showing it to my firstborn when she was four, and she had no idea how to read the number. She would say something like, “Is that more than four dollars?” My answer? “Yes. It is at least five dollars.”  

Teachable Moment: You are so important to me that I am investing in your future (college – which wouldn’t even happen for another 14 years at that time.) AND Proverbs 13:11 is true. When you gather money little by little, it will grow. 

  • Every time Jenn and I plan our money, we split our money into three large categories – GIVE, SAVE, and SPEND. We use a kit put together by Dave Ramsey that helps teach our children this concept. It is called Financial Peace Jr and it includes three envelopes that say “GIVE,” “SAVE,” and “SPEND.” Every time our children earn money (No allowances in our house! We promote the “Work = Get Paid; Don’t Work = Don’t Get Paid” concept), they split the money between the three envelopes. We have taught them that 10% should go into GIVE, 20% into SAVE, and that they can spend the rest. With a plan, of course. 

Teachable Moment: Life is grand when you are able to GIVE, SAVE, and SPEND! 

There is NOTHING better than investing time into your children. The return on investment is so great. By walking what you talk about, you send a crystal clear message that this is extremely important. 

Are you “walking” what you are “talking”? 


Provide Opportunities for Your Kids to Learn About Money 


It is incredibly important that your children are able to apply what they are learning about money. When my oldest was around four years old, she was saving money for her first big purchase – a Care Bear. This purple Care Bear came with a DVD and everything. Can life be any better if one has a purple Care Bear? For my daughter, the answer was clear. 

This bear had a selling price of around $18, so it took a long time for her to save up for this purchase. Now, this is a large purchase and it is a Care Bear and the money would do better in a mutual fund, but how can you have a teachable moment if you don’t let children have some running room? 

So the big day arrived. $18 was saved and it was time to make the purchase.  

Teachable Moment: If you save diligently, the day will come to make the purchase. 

One evening, she and I had a “daddy-daughter date night.” She chose to eat at Ponderosa Steakhouse Buffet because they had unlimited amounts of mac-n-cheese. Afterwards, it was time to make the big purchase. 

We went to Walmart, picked out the Care Bear and headed to the checkout counter. There was no one in line at the checkout and she began counting out her money (nickels, dimes, and quarters). By the time she was done counting, we had over ten people standing in line behind us. I was so proud. My daughter had saved for this purchase. 

Teachable Moment For Parents: If you teach your children this stuff early and often, you will have the opportunity to stand back and watch your children win financially in the long run. 

Flash forward three years. The Care Bear has now rested comfortably for at least a year at the bottom of the stuffed animal box. You can probably buy the same one at a yard sale for $1.  

Teachable Moment:  It’s OK to buy stuff, but what would have happened to that $18 if you had put it in a mutual fund? 

Provide the opportunities for your children to learn about money. It is awesome to watch them learn. 

What opportunities are you providing your child to learn about money? 


Teach the Core Principles 


Anyone who has attended a Financial Learning Experience (our live teaching event) knows the Four Core Principles by heart. 

#1: There is POWER when you work TOGETHER on finances. 

My children will know how to manage finances. Should they marry one day, my hope is that the example lived out in front of them by Jenn and I will inspire each of them to work together with their spouse to win with money. At most weddings, the minister pronounces that “the two become one.” This applies to finances, too. 

#2: Avoid the DEBT TRAP. 

Bad debt is a wealth-killer. I remember the day one of my children borrowed a dollar from Grandma to buy something at Walmart. I said, “Oh my, you are now in debt! You are in DEBT to Grandma!” She got so upset that she almost cried. This sounds like I am a mean parent. Some would say it is cruel. I say that I am teaching her the realities of money, and that the borrower is indeed slave to the lender. (Proverbs 22:7) 

#3: Have a PLAN for your life. This creates the REASON for you to plan your finances. 

My children have plans for their lives. Early on, my eldest daughter had clear goals. She wanted to be a veterinarian, move to San Diego, work for the San Diego Zoo, and live in the round hotel. Of course, time has a way of changing plans, but she still has plans, hopes, and dreams. So do my other two children. I am intentionally raising my children to be dreamers and visionaries. 

#4: Have FUN managing money TOGETHER! 

It is not all about investing every single dollar. It is not all about living in a refrigerator box. The whole reason we all want to win with money is so we can accomplish our God-given plans, hopes, and dreams. I teach this to our children every single day. By the way, forsaking a high-paying corporate job to go to work for a church and moving nine hours away from family is a pretty good way to show my children that God-given dreams can be accomplished. Look at what this movement to help people win with money has accomplished since 2006. 

Have you had a conversation about money with your kids this week? 


This is a PROCESS, Not a One-Time Conversation 


This is not a one-time conversation. Learning is a process. It happens over time. With multiple conversations. With both good and bad attitudes. In different situations. It is intentional. 

What Jenn and I have taught our children so far has been intentional. We plan on keeping it that way. As we approach the next decade, we will teach them many more financial and life lessons. We have successfully raised our child to adulthood. The other two are on the way. It is a process. It requires commitment. Ultimately, it will be worth it when we see each child embark on their adult lives with financial confidence and become truly independent. I believe it is one of the greatest blessings any parent can bestow upon their children.


Lessons We Still Want to Teach Our Kids About Money 


To wrap up this post, I thought I would share some of the lessons upcoming for our children. Some are new and some are continuations of lessons already in progress. 

  • God is the Owner. We are managers. 

We are teaching them that everything we have is on loan from God. Luke 16:10 resounds through my head. There is a good potential for our children to be left with a great inheritance (something the Bible says we should do – Proverbs 13:22 shares that “a good man leaves an inheritance for his children’s children.” If we don’t teach them to be great managers, their lives could be ruined by the inheritance. 

  • Giving and saving are top priorities. 

This lesson is already in process, but it will continue to be reinforced. There is nothing more satisfying than giving to a worthy cause and saving money for God-given hopes and dreams. 

  • The fundamental business concept of “profit.” 

It is amazing how many business owners forget this concept. Our children will know this concept forward and backward. 

  • It is OK to wait to make a purchase. 

Bad debt is not worth the immediate gratification. The gratification will swiftly go away, but the debt will pay a visit monthly. 

  • Learn the most powerful word in the English language – NO! 

Already in progress on this lesson. It is so important to have self-control. 

One of the greatest gifts you give your child(ren) is the gift of financial confidence. I encourage you to prepare a plan today on how you will intentionally invest in your children’s financial education. 

What ideas have you put into practice as a result of this series? 


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