Financial education is so important and teaching our children the importance of money matters at an early age can foster a healthy relationship with investing, savings, spending and funds in general.

So where do we begin, parents? How do we start these important life-long lessons?

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Financial Education

Let’s be honest, the times have changed for many parents. Many families are looking into saving money and being more conscious when spending it. If our kids do not understand why their parents can’t afford those expensive new shoes or that thousand-dollar iPhone yet, now is a great time to teach them these valuable lessons and how to be smart with money. We do no life favors by sheltering them from early on financial lessons.

Important Financial Lessons


There are a couple of sayings that will go a long way. The first is, “honesty is the best policy” and the second is “money doesn’t grow on trees”, (although I have heard some witty responses to the second one).

Kids can begin to learn how exactly money is made. “Mom and dad go to work, and while we are at work, we make money. The money we make helps us collectively as a family buy things and help us take care of each other.”

Explaining Cost 

Explain cost of goods and services. This can be as simple as “the food we eat, the place we live, the clothes we wear all cost money.”  Diving into how money is used will enable their mind to begin to understand how finances work, which will build the foundation on how to be smart with it.

If your children are older, you can teach them about debit cards and credit cards and what that important difference is.  The difference is very important!

A lesson on credit cards is extremely valuable because not only do you have to pay back what you purchased, but you also have to pay back the interest incurred on those purchases.

If you use a credit card in front of them, explain how that works and the implications it will have later on. It is a great opportunity to learn about interest, and how you can end up paying more than what you originally purchased an item for.

Trial an Allowance.  

Once they understand the concept of how money is earned and how it is used, then an implementation of an allowance can be beneficial to further their understanding of finances. Explain to them that they will be able to be paid for their “work”.

Set up a family allowance chart. For example, a grade A on a report card can bring a certain amount of money or doing a chore can bring a certain dollar amount too. Whatever the agreed upon terms are of the allowance will allow them the opportunity to learn about spending, saving, investing and even being broke.

A Family Affair 

Ask them questions and make it entertaining for them. You can do an internet search for age-appropriate books, games or shows that can talk about the topic as well. A great early learning financial game is Monopoly, where children can learn about investing, payments, and financial decisions. Remember owning a hotel on Boardwalk and Park Place as a kid?

Another activity can be shopping online or at a storefront with their allowance money. This is a great opportunity for children to learn about financial decisions. They can see a new perspective on the latest iPhone costs or those new shoes with a new vision.

Another family activity to learn about money is to take your children to a grocery store or a toy store. This is a valuable lesson on how if you keep adding to your cart, the final bill increases. You can even implement coupon use to show them smart ways to save. These trips can provide a valuable lesson on how to be smart with money.

Sum It Up

In conclusion, teaching kids how to be smart with money is a valuable lesson not only for them, but for the family too. Teaching children that money is earned, how finances work, the value of a dollar and the experience of learning firsthand at an early age will enable them with the opportunity to be smart with money for the rest of their lives.


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