5 Tips To Jumpstart Teaching Financial Wisdom To Your Children

Raising Money Smart Kids

Many of you have heard the verse from Proverbs that reads: “Train up a child in the way he should go, and when he is old he will not depart from it” (Proverbs 22:6, NKJV). I believe that a significant part of this training should include teaching financial wisdom to our children while they are still at home.

How are you teaching your children to UNDERSTAND and MANAGE MONEY? Learn 5 tips to help you jumpstart teaching financial wisdom to your kids.

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We parents are charged with equipping our kids with financial wisdom so they understand how money works and how to manage it. If we do it right, we will put them on the path to becoming productive and contributing members of our society.

If you’re anything like me, you may be thinking to yourself “wait, I don’t have enough financial wisdom (or money) of my own; how am I going to teach these money skills to my kids?”

Let me be frank, I can be terrible with money management. I have made many poor financial decisions throughout my life. But I have also learned from my mistakes and (maybe more importantly) I have learned from the experts in the field.

That’s right, you don’t have to do this alone. There is help for you to teach financial wisdom to your children. Whether you’re terrible with money like me or you feel like you’ve got a good grip on your finances, your kids can be money smart.

To help you jumpstart teaching financial wisdom to your children, I’ve come up with 5 tips you can implement right away. Even children as young as 3 years old can start learning these financial concepts.

5 Tips To Teach Financial Wisdom To Your Children

TIP ONE: Teach Your Children That Money Comes From Working

The first concept that your children need to understand is that money comes from work. Before they start earning money, they need to understand that we all have our parts to play in this world, and part of that role is earning a living.

In our household, we talk to our children about our jobs all the time. We discuss how we have a responsibility to go to earn money. Talk to your kids about what money is used for in life.

Help your kids understand that money is earned to pay for things we need, like our home, our food, our clothing, and other necessities of life. I recommend also discussing how we enjoy our money by purchasing things we want.

This is a great opportunity to start a conversation with your kids about the difference between necessities and wants, and how to prioritize these things in our lives.

TIP TWO: Give Your Children An Opportunity to Earn Money

Even very little kids can start earning money for their work at home. I don’t advocate paying children for all of their chores. They need to learn that we all have some things that we have to do, like picking up after ourselves, that we don’t get paid to do.

But a great way to introduce the concept of earning money for work performed is to come up with a list of chores.

Put the chores on a chore chart, list out how much a child can earn for each chore each week, and at the end of the week have a payday. As your child completes a chore, mark it on the chart, and at the end of the week pay them for their work.

For small children, waiting a week may be too long to connect the payment with the chore so go ahead and pay young children as they complete each chore.

TIP THREE: Teach Your Children About Spending

Now that your child has earned some of his own money, he’s going to want to spend it on something. Children should be allowed to spend the money that they’ve earned.  But, as parents, we need to put some parameters on what they can purchase.

Have a talk with your child about things that he may want to buy with his money. This conversation will allow you to discuss:

(1) the reality of what things actually cost;

(2) what items your child is not permitted to purchase; and

(3) will help your child come up with a list of items that can be categorized as good choices or bad choices.

TIP FOUR: Teach Your Children About Saving

Inevitably your child is going to want to purchase something that he or she cannot afford. This is the perfect opportunity to introduce the concept of saving. Talk to your child about how much money he needs to purchase the item that he wants versus how much money he actually has to spend.

Use a piggy bank or an envelope that is specifically marked for purchasing the higher cost item. Each week at payday, help your child determine how much to put in the piggy bank or envelope to save.

Don’t forget to discuss the concept of savings goals and determine how long it will take to save for the coveted item if they save $X amount each week.

TIP FIVE: Teach Your Children About Giving 

In our home, one of our core family values is giving to others. If this is one of your core family values, start teaching this value early on.

To pass on this spirit of giving to our kids, we do several things. We discuss how giving can come in the many forms: service to others, donating items, or providing money to individuals or organizations.

A great time to introduce the concept of giving is on your child’s payday. Help your child pick a charity or two to give money to and determine how much money to set aside for his charity of choice.

Raising money smart kids takes time and effort. But it’s one of those things that your children will thank you for later in life if you stick to it. Implementing these 5 tips is a great way to get started.

For more information and ideas on raising money smart kids, check out these two great resources that I’ve used myself:

The Financial Peace, Jr. Kit

Smart Money Smart Kids.


Do you have any ideas for raising money smart kids? I’d love to hear your ideas in the comments section below.

With Love and Joy,


Please note: I reserve the right to delete comments that are offensive or off-topic.

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