For Parents

Financial Lessons One Day at a Time

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Teaching kids basic financial lessons as they age is an extremely important part of their lives. Learning about how money works, value, saving, credit cards, etc is one of the most necessary basic life skills. Teaching our kids basic money lessons while they’re younger and progressively giving them more realistic examples as they age will help make them responsible young adults. While many of us don’t want to give too much financial information to our kids, it’s important in daily situations such as at the grocery store, out to eat, and at the bank to be constantly teaching small lessons about money.

The Value of Money

In today’s world, money is even more confusing than it used to be. Kids of all ages see a piece of plastic change hands or numbers being typed onto a screen and it can be misleading. They are still exposed to actual paper money, and they may know how 2 fives’s make a ten, but with so many transactions being conducted digitally, the relative value is lost. Instead of a $510 bike costing 25 twenties and 1 ten versus a simple toy $22 toy costing 1 twenty and 2 ones, they both are 1 credit card swipe. This can be very confusing and without explanation, kids lose respect for how much things cost.

The Lesson: Put things in relative terms. Use examples such as, “This bike costs the same as 25 toys.” Additionally, as they get slightly older, use real scenarios. Let them have a cell phone, but tell them if they incur an additional charge, it’s their responsibility. This is a good way to reinforce the consequences of being careless with things that cost money.

Earning Money

It’s important to learn about earning money. While money isn’t everything in life, it’s certainly a necessity and it’s good to realize that when you want something, you have to earn it. Don’t be too intense too early, but always encourage hard work. As you grow up, maybe you aren’t earning money, but more skill at a sport, better grades in school or becoming better at an instrument. Any lessons that teach them about being rewarded for effort are positive. Lastly, say, “No” to your kids or, “No, unless you do this…” If you always say, “Yes” they won’t feel like they need to earn anything.

The Lesson: The Lemonade Stand is a classic example and your neighbors are sure to be customers on a hot summer day. It is a very positive, fun way to begin teaching the important life lesson of making money. They advertise by putting up signs and yelling out, “lemonaaaade!” They exchange goods for money and they have to make change, putting those math skills to a “real world” application. At the end of the day, they are rewarded with a little cash to go spend on a toy or tasty treat.


It’s critical to establish good saving habits. It’s important to realize that just because you have $100, it doesn’t mean you should go spend $100. Saving not only teaches how to be financially smart, but it also reinforces the value of patience and responsibility, too.

The Lesson: A great opportunity is when your child wants something that costs as much as a few allowances. Explain that if they want something, they can save up. Yes, they have to sacrifice slightly in the present but gain in the future.

Watch and Learn

The most important thing you can do is set a good example. If you respect the value of money, work hard to earn it, and have good saving habits, your kids will catch on. They’ll watch you go to the bank to deposit money, compare prices at the store, and ask how much things cost. As they get older, reward your teens as they show financial maturity and encourage the same good behavior you practice. My parents set a great example and I started an online hacky sack store in high school for fun.

About the Author

David McCurrach

David McCurrach is the founder of Kids' Money. Following a career working in finance for several banks and credit unions, David started Kids' Money in 1995 and has since published three books on kids' financial literacy and allowance programs.

Last updated on: August 28, 2023