10 Ways to Raise Money-Smart Kids

Money-Smart Kids

John and I have never been rich (by Western standards, anyway), but we’ve always done our best to be wise users of our resources.  We’re working to teach our children wise money habits as well.  So many people these days are struggling under mountains of debt, due to college and  new vehicles and too-much-house and too-much-shopping, as well as all sorts of other expenses that can sneak up on you. John and I have fallen into some of those pitfalls ourselves.  And we know that our kids will have lessons of their own to learn out in the world.  But we are doing our best to prepare them well so that they can avoid some of the most common problems. Here’s some of what we’re doing:


  1. Teach kids to be good workers, the kind of folks who give 110%, not 90%.  This has got to be one of the first lessons kids learn, at a young age.  Folks who aren’t afraid of work get noticed out in the world these days, and they’ll have an easier time finding jobs both as teens and as adults.
  2. Provide for kids’ needs, but as they grow begin to require them to pay for their own ‘wants’.  For example, we’ll pay for $30 shoes.  But if teens decide they’d rather have the $60 ones, they get to fork over the extra $30.  Sometimes they do it;  more often they decide they don’t want the spendy shoes enough to spend their own dough.
  3. Give kids ways to earn extra money for special projects, but don’t feel like you have to make it too easy.  It’s okay that earning money feels like work.  If my 8 and 10 year old girls beg me to buy them something at the store, I’ll often say, “Sure, if you’re willing to weed for half an hour to earn it.”  Sometimes they go for my offer.  More often they reconsider that particular impulse buy.
  4. Require that kids save a portion of everything they earn.  As income grows, we increase the percentage we ask our kids to save.  The latest gadget will be out of date in a year or two, but nobody ever regretted having money in savings.
  5. Take kids shopping with you at yard sales and thrift stores, as well as in regular retail stores.  Help them check out Craigslist for bigger-ticket items. Our kids love to go thrifting, and they know first hand how much further money goes at thrift stores.  (See our $20 thrift store challenge.)
  6. Talk with teens about future expenses using real numbers.  Kids may think that minimum wage sounds like lots of money– until they sit down and look at prices of rental housing, used vehicles, electricity, gas, and car insurance.  Recently my teens and I calculated that a person would need to work 38 hours a week to afford a very basic apartment in our area, ride the bus to work, and spend only $200 a month on groceries.
  7. Let teens try shopping for groceries for a week and see how far they can stretch the money.  (Read here about our $20 grocery challenge.)
  8. Teach kids to cook.  Being unafraid in the kitchen will save them lots of money over the years. Several homeschooling mommas have told me that Family Feasts for $75 a Week makes a great home economics course.
  9. Model creative problem-solving when things break around the house.  Often you can repair broken items and save big bucks. (Here’s how we fix broken vertical blinds.)
  10. ‘Sneak’ wise money advice from other folks into kids’ ears whenever you get the chance. I listen to Dave Ramsey podcasts when I’m working in the kitchen with my kids, both to keep myself motivated, and to allow my kids to hear stories from folks struggling to overcome bad money choices.  Though it’s inevitable that kids will make (and learn from) their own mistakes, I’m hoping they will also learn from the mistakes of others, and have a jump start on wise and careful spending in adulthood.


Along with all these ideas, we also share stories with our kids of the many ways that God has provided for our family over the years, and to talk to them about joyful giving as a way of thanking God for all He’s done for us.

How do you teach your kids about money?  Please add your wisdom in comments, below, to make this post more complete.

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  1. We also encourage giving at a young age. Our elementary age son gets $10 in allowance each month-$5 to spend, $3 to save and $2 to give to a good cause. I see it as a way to practice what we want them to do when they are older. He gets excited about the giving to missionaries or food for the homeless.
    The older teens get their own clothing allowance to spend, but they have to buy everything they need out of it, the boring stuff, not just fun stuff. They split gas for the car they share, so they have to track their mileage, which makes them pay attention to how much it costs to run a car. They pay a portion of car repairs and participate with talking to the mechanic. They have saving and checking accounts starting in high school. We have asked them to save up an “emergency fund” which we will match. This was after our daughter had a fender bender and suddenly needed to come up with $600 for the repair of the other car (could have been worse!) We are trying to do as many things as we can to prepare them for life on their own. This includes being open about our past regrets about how we’ve used credit! I think the biggest thing we can do is model for them what we want them to do. Our bathroom is torn apart because we are doing the work ourselves a little at a time, my husband took a new job with a pay cut and they watched us crunch the numbers for a new budget, use mint.com, build a little business with no debt, put cash in envelopes and give to missions. We have made a lot of mistakes (one failed business led to bankruptcy) but we hope they learn from us!
    One more thing I think we will talk with them a lot about is how the person they marry may have really different ideas about money and how important it is to talk about as part of marriage and before marriage.

    • Fabulous advice here, Alyssa– thanks for sharing!


    • We tried to teach our sons to be frugal also, especially with great finds at yard sales!
      The part about the person you might marry is a good one. Our youngest son was dating a girl who had $38,000 in student loans to pay back, then put a $3600 surgery for her cat on a credit card, while she was earning minimum wage working as an aide at a veterinary clinic. He was really bothered by this (although he did like the cat). They dropped the relationship within weeks.

  2. I love these! We have just started to seriously teach the kids about managing money the past few years, along with giving them ways to earn money above and beyond their allowance, which to us is something you just get because you are part of, and share in, the wealth of the family. Their allowance isn’t much so it’s exciting for them to have ways they can add to their pocketbook.

    Because we are who we are and do what we do, we are adding to their money management training the idea of only spending savings on things that will make you money. You can save up your spending money to buy things. But savings itself only comes out to invest in something that will pay back the investment and help make more money. It can be as simple as a lemonade stand, but there’s no reason to stop there. We want them thinking entrepreneurially, not just about how to spend wisely and stay out of debt, but how to create opportunities to make money as well.

  3. I absolutely agree! When Papa and I were growing up, our families didn’t have much, so we had to find ways to earn our own money. I babysat, he mowed lawns, etc etc.

    That has translated into Jackjack being quite the little entrepreneur. He recently decided to sell bottled waters at Papa’s comic book store during a Sidewalk Sale and made a net profit of $24.50–tons of money when you’re 8!