A Parent’s Guide to Teaching Kids About Financial Wellness

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Before you know it, your children will begin to tackle financial responsibility and use your fiscal habits as a basis for their own. It’s never a bad idea to start teaching them about money early on. Doing so can help them be conscious decision-makers about finances and avoid debt.

While it’s impossible to shelter your children from every monetary mishap, you can still guide them in the right direction. Allowing them the opportunity to learn the flow of money first-hand can be a great way to reduce unnecessary spending and even instill healthy saving habits. Thankfully, taking just a bit of time to do fun and simple activities is all you need. Read on in our guide to make teaching your kids about finances less intimidating and gain some ideas to help you through it successfully.


First things first; be a role model. Kids watch, listen, and learn from their parents in more ways than you may realize. Whether you’re discussing finances with your significant other, friends, or other family members, make sure to keep the conversation positive. Of course, it gets frustrating when a utility bill increases or your car breaks down unexpectedly, but it’s crucial to remain collected and confident. 

If they witness frustration or worry about money from you, it could make them apprehensive to take on financial responsibilities of their own and to become financially independent. Sit down with them when money becomes a stressor and teach them how to design a budget for unexpected expenses. This gives you an opportunity to organize your finances to relieve stress and also creates an interactive lesson for your kids.


It may be surprising to some, but one of the best things you can do to start teaching your children about finances is letting them handle money. Using play money in board games is a good start, and makes it easier to introduce real money into their life, such as with an allowance. 

Allowing kids to prioritize their own money teaches them the life lesson of saving, and gives them an opportunity to practice this skill as more responsibilities arise. Discover some of the best activities and situations to help teach kids about financial wellness below:

The Difference Between Responsibility and Requirement
Kids have very active minds; they learn more and more every day. When you start introducing the fundamentals of money, make sure to explain the difference between responsibilities and requirements in life. 

Responsibility could involve daily chores your children receive an allowance for doing. Making the bed or doing the dishes amongst other similar tasks are great starter responsibilities. Guide them towards better financial management by rewarding them after completing an activity not expected of them as well. This is a perfect way to show working hard at a job pays off. 

Show Your Finances
While taking care of your monthly bills, have them sit with you as you manage your budget. It’s best not to hide negative expenses like debt because it’s normal, and shouldn’t be intimidating. Displaying finances in a positive manner can encourage them to further figure out their own budgeting plans. 

Have them use basic addition and subtraction within your statements to determine answers such as, “how much extra money do I have this month?”. You can also explain the reason for tax and interest on things: sometimes to get, you have to give a little extra. 

Security of Savings
The key to helping children successfully build up their savings is to never force them to save because this could become a chore to them. However, it’s smarter to encourage saving while spending. 

Simply enough, just start with a piggy bank or coin jar. As they notice the pile of coins growing, you can take them to a coin deposit machine to find out how much money they saved up. Seeing the total amount as a big number is a huge reward for kids. 

Shopping List with a Budget
Are you often searching for more thrifty options in stores to save you some money? Teaching this shopping strategy to kids early on will help them to continue this healthy habit into their adult lives. 

Make a list together of things you need at the supermarket with a budget limit. Next to each item, write down a few prices from different stores to compare them. Look for deals, sales, and even coupons available. Calculate how much money you’d be saving after these, and set aside that total for next week's shopping trip. You’ll want to keep your budget top of mind when shopping. If kids see that it’s ok to go over, even by a little, it will become a trend in their own budget.

The Power of Credit Cards
Most of the time many children, especially when they’re very young, don’t realize what that plastic card in your hands actually does. If you let them use your credit cards to purchase things online or in the stores, this could easily be mistaken as a limitless amount of spending. It’s best to keep credit cards for emergencies only to avoid any recklessness while they’re learning. 

As an alternative to digital money, you can dedicate more time to the basics by having them pay and count with cash. Once they get more acquainted with cash in hand, they’ll be able to make the connection faster digitally. 

Reuse Instead of Waste
Turning trash into treasure around the house can be an inspiring way for children to use their spent money wisely. Maybe taking an older toy and cleaning it up would be just as good as a new one from the store. 

Kids can watch you practice this too, everyday. In your kitchen, be sure to become plastic-free and prioritize using glass, stainless steel, and silverware. They’ll be watching you throw money in the trash less often. Not only does this save money over time, but it also is better for the environment and your health.

The Importance of Giving
Lastly, another positive financial activity to practice is teaching children about generosity. They’ll soon realize that giving and receiving is one and the same throughout life. While there is a fine line between being generous and giving too much to friends, family, a significant other, as well as even a charity, keep it balanced to once in a while special occasions to help clear up confusion. During the holidays is a perfect time to practice this. 

Each of these activities and tips to remember can help shape your children as they come across different stages of their finances. Memorable milestones to be conscious of can start in their early teenage years such as when they get their first credit card. They’ll experience how to continue managing their digital money account daily as it increases and decreases.

As they reach their older teenage years, they’ll realize they want a car and need to do a bit of saving for it. As they begin prioritizing saving, they will see how putting away pays off in the long run and favor of their overall budget. 

During their adult years, they’ll understand how budgeting can set them up for success when balancing bills. This reflects especially when they’re paying on a house mortgage one day. Understanding the financial intricacies of major life purchases like a home as well as the elements that go into it and their benefits can help in developing financial confidence in the future. Knowing their options and resources in terms of what type of loan their credit score can get them, home equity built up in their house and types of loans, to even when they resell is all important for them to be able to think about one day. As they learn to balance their money, these types of things will be understood quicker, allowing them to take
better action.

Once they get into the flow of balancing finances, they can even think about retirement with their future job. Putting away for this early on in their career can help them to see how it will provide them with a more financially stable position when they’re ready to retire. Each of these activities represents how your children can be successful financially one day. Soon enough, you’ll see that your own teachings positively impact their financial direction.

Most importantly, while trying these activities with your child, be extremely patient and constantly account for errors. Rather than saying, “we can’t afford that” or “you shouldn’t do that,” suggest things in a way similar to “maybe this can go towards a better choice.” 

Sooner than later, your children will be picking up on handling money and how to best handle finances to help them thrive as they grow up. Plus, with the company of your encouragement and guidance, kids will see that you’re always there to help them no matter how old they are.