If you want to teach your child the most important things about money, but actually don’t know how to do it, look at the list below. Because schools usually neglect teaching about money, parents often search for the best tips and lessons about finances, to teach their little loved ones. For this purpose we created a list of 20 the most important things you should teach your child about money.
To raise an enterprising kid, you should teach your child basics of financial education from the youngest age.

Primary school children are unlikely to be interested in in-depth analyzes, theoretical stories or financial details or charts. But they are very good at absorbing real-life examples. Therefore, in order to not discourage them, it’s best to learn your kids by playing games and by showing them real-life examples.  When we add an additional reward, the child will have more motivation and will learn perseverance. So in order to efficiently give your children best knowledge about money you should teach them answering their questions while they ask you (for example when your kid asks you how much does president earn? or why you cannot buy them that expensive thing). 



1. Show your kid that money can work. 

Let your children see  how money can generate more money. Show them how deposits earn (in theory) in banks. Or teach them how they can invest money from credit to generate even more money.

Example how to teach it: Play the bank game. This is the story of one man who taught his 7yr old kid: *You are the bank that give your kid $10 * She bought a kid jewelry maker for $10 * She sold 1 bracelet to my wife for $20 *She Payed me (the bank) $12, my daughter kept $8 for herself!

2. Money is not goal in life itself. But is important. 

Money is a tool. Nothing more and nothing less. If you are a jerk money makes you bigger jerk. If you are mother Teresa, money makes you more mother Teresa. You should learn your kids healthy attitude towards money. On the one hand not to love it too much, and on the other hand to know that without money they cannot do much in their lifes.

Example how to teach it: This lesson is not easy to be explained with one example. You and your spouse have to be good role models, so kids can learn from your healthy approach to money. You shouldn’t be too sly and not too extravagant. When rational arguments speak for spending money, do it. And when it is rational to save, save. Show balance and that money owning is responsible function. Never let your kids think that they are better because they have more rich parents and better clothes than other kids. Teach your kids modesty on your example.

3. Be enterprising and ingenious  example for your children

Recent research show that children take an example from the financial habits of their parents. If children are brought up in a home with a healthy financial situation, they will most likely have a similar financial situation in the future. Unfortunately, if children from an early age see negative practices such as life above the state, then more than likely they will also live like that. You can read more about impact parents have on their children’s financial habits in this article.

Example how to teach it: Invite your children to your workplace. Let them understand where the value of your earnings comes from. Let kids take part in planning your family month budget. Let them decide about something small and in the meantime observe how you plan budget.

4. Teach your child what is the difference between ASSET and LIABILITY 

There are two types of purchases in our lifes. Assets that are things that are useful for generating more money and can be used for business and incomes. And the Liabilities that are things that we purchase but they are not useful for improving our financial condition. This is the main lesson from the famous book Rich Dad Poor Dad (if you haven’t read that yet, you should). 

Example how to teach it: When your child will be wise enough to understand this lesson (at least 12-14 years?), try to explain to him what is the difference between assets and liabilities. Take a small paper card and write on it “is this asset or liability?” let your child put it in his wallet. Let him always ask himself this question when he wants to buy something.

5. Save money today, Invest in something cooler tomorrow

Children need to see from their youngest age that every small decision about spending money has impact on another money spendings in the future.  If you do not spend your money on something stupid then you can spend it on something cool.

Example how to teach it: Show them that if they will spend their money today on sweets, there will be not enough money to buy bike tomorrow.

6. Let them be independent

Teach your children that they will not have their parents’ money and help forever. One day their parents can die, bankrupt or lose a job. It’s really good to let your children know, that they must prepare for earning on their own cause one day something unexpected can happen and better your kid be ready in that day.

Example how to teach it: Talk peacefully with children about the future. Try to see what they think about working and earning. Ask them how they would earn $ 500 if they had no choice and were forced to do so now. Listen to how a child imagines a plan to make that money. Carry out a hypothetical analysis of his idea with him. Advise him how best you can. Maybe one day your divagations will become his real business plan.

7. Because you were born in rich family does not mean you are better

You must never let your kids laugh at poorer children because of their financial situation. Do you know these children of rich parents who have not achieved anything yet but are behaving with haughtiness, contempt and like an assholes towards their poorer colleagues? Never let your children become like that.

Example how to teach it: Teach your child how to help the poor. In the end, children take an example from their parents. You can come together to an orphanage to help orphans and spend a nice day with them.

 8. Teach your child to control their finances

Many people spend money so easily, that they not even realize when they do it. Teach your children to think twice before spending money.

Example how to teach it: Teach your child how to say no to himself. When a child is with you and wants to buy something for his money, be for your kid like a voice in the head of an adult who says “do not spend that money on that toy”, “it’s cheesy and will break down tomorrow”, “if you save that money you can buy something more useful (and give your example here)”.

9. Show your kid financial rules

There are some great financial habits that are simple and also very effective and secure. One of that habits can be 80:20 rule. This rule says that you can spend only 20% of your savings in 1 month. That gives healthy and safe attitude. If you want to teach this to your kid, you must show to him that you are doing the same. There are many other nice rules that will teach your kid positive habits.

Example how to teach it: Every month if it comes to the spendings follow this rule. If there is a situation when there is possibility to spend more than 20% of your all savings at once during 1 month tell your family – no this is against 80:20 rule of healthy finances. We will not spend that much money. Your kids will remember situations like that and learn that you can live following that rule and still be happy and live a good life. They will also see good sides of such rules.

10. Show your kid ideas how to earn first $

As we all know the most difficult is to earn the first dollar. Show your kids opportunities. The more they will learn as teenagers the better impact it will have on their future.

Example how to teach it: Selling lemonade in the yard is just the simplest example. Lawn mowing. babysitting and dog walking are other good ideas how to awake entrepreneurship in your children.

11. Set with your kids financial goals

Teach your children that if they set a goal and save money, they can buy things which they normally could not afford. Guide them how to calculate how long time they must collect money and how to manage their spendings in order to be able to realize their goal quicker. Show your kids that they can cut some spendings, for example they can stop buying chocolate for their pocket money, so they will have additional 10$ saved every week.

Example how to teach it: Set a goal together with your kids to buy an electric scooter or playstation (or anything they want). You can help with it by creating “investment fund” for this goal. Your kid will be giving you its savings, and you will take it to your “saving account for the electric scooter”. Once your kids collect the whole amount you give them all money and buy that what was planned.

12. Show your kids examples of people who lost all their money and bankrupted

That is not the point to scare the children! The idea is to make children aware, but very gently and without exaggeration, what are the consequences of the negative management of their finances.

Example how to teach it: Explain your kids how some families lost their homes and all wealth because of reckless financial attitude. It is also a good idea to explain your kids mortgage crisis and how people lost all their life savings because of risking too much. You can do it watching together films about that, or showing articles about such stories.

13. Show diversified sources of incomes and diversified methods of saving and investing

If you want your kids to be safe teach them to diversify their financial security in the future.

Example how to teach it: You can play board games such as Monopoly, where children learn to invest in different things and see differences between sources of income.

14. Teach your child to have individual financial habits

Teach your kid that  buying ordinary trendy things like ones that their friends have does not have to be always the best idea. Instead show them that for this money they can buy something better and more useful, which is even more special.

Example how to teach it: when other kids get new computer games, you buy your kid telescope and teach him how to observe celestial bodies.

15. Do not spend more than you earn

Some kids learn from their parents to spend more money than they have. One of the worst things that you can teach your kids is to live with debt and spend more than their income. If you don’t want your kids to be in the future dependent on bank’s credits show them how to live operating only their own money.

Example how to teach it: Do not borrow money to your kids. Even if there is something that they really want or need do not do it. Eventually you can offer them offer of any paid work, or better help them to find any easy work in neighbourhood like a dog walking.

16. Develop productive habits

There are so many productive habits. Show some of them to your kids. This will let them understand that being productive and successful is not just an accident which happens to few special people, but it’s part of the good life.

Example how to teach it: Productive habit can be working every Saturday together with you in your garden and taking care of it. When your children are teenagers productive habit can be finding summer work every summer.

17. Noone owes you anything

Explain your kids that they must achieve most of things in their lifes themselves. Money of their parents is not their money. Some people demand a lot from others. Don’t let your children be like that unless they are healthy and intellectually efficient nearly all forms of excessive facilitating their lives will actually be harmful to them.

Example how to teach it: When your children will be at the right age, persuade them to do one of these hard, not very well paid jobs. Such works teach to be humble and empathy towards other people and show what the value of money and work is.

18. Let your children make mistakes

The truth is, that one of the most memorable ways to learn, is to learn on our mistakes. Time of childhood should be the time when your children have the possibility to do some financial experiments and even risk money. Your role is to  make sure that your kids will not get into trouble, and what is very important to explain them what they did wrong and the plan did not succeed.

how to teach it: Just encourage your kids to do some financial experiments and to try some small investments

19. The difference between “I want” and “I need”

Explain your kids that not everything that we want and like is good for us. Understanding this is especially important when it comes to spending money. This lesson can be the most difficult one. 

Example how to teach it: Sometimes the best way to explain that is to just do heart to heart honest conversations with your kids.Often, if it comes to teenagers, the excessive desire to spend money and saying that they need everything, can be caused by problems, for example problems with other kids in school, which they want to cover with expensive, cool objects.

20. The best way to earn money is to help others

There is no better way to get rich, than by offering to people what they really need. Teach your child how pleasant it is to earn money from people who are also grateful for what we have done for them.

Example how to teach it: Tell your children about the most valued inventors and winners of the Nobel Prizes. Show examples of people who have made large fortunes by doing good things that are useful to other people. There is many great examples to follow.


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