Personal Finance

How to Teach Your Kids All the Money Lessons They Won’t Learn in School

Expertise: Personal Finance
13 Articles Written

“My parents didn’t teach me anything about money.”

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That was my first complaint when, as an adult, I finally started to learn something about it. Since then, I’ve overcome the “blaming” mentality; I took ownership and resolved to learn as much as I could.

But it hasn’t stopped me from feeling baffled at just how little useful information we learn about money growing up. It seems the school system is somehow allergic to the topic. And the reality is that parents who don’t know much about money themselves aren’t able to pass along many pearls of wisdom.

Of course, we all absorb something along the way.

My parents taught me that you have to have a job; nobody likes a freeloader. They also taught me how to spend money as fast as I earn it. One of these lessons has proven more useful than the other.

In university, I took a course entitled “Engineering Economics.” It was mostly about the time value of money with a few engineering-ish problems thrown in. I got an A+ but remained financially illiterate for many years.

The job market of New York City taught me how to sell my skills and experience to the highest bidder.

I read The Wealthy Barber by David Chilton. It is very well written, but contains mostly high level “retail” advice on money: Invest in mutual funds.

Armed with this information, I charged into the world and made an absolute mess of my finances.

Years later, in my late 30’s, I finally started getting my head around my finances. And I vowed to do better for my kids.

But how exactly do you go about doing that?

Plan Ahead

In their book, Smart Money Smart Kids, Dave Ramsey and his daughter, Rachel Cruze, discuss how personal finance guru Dave taught Rachel and her siblings about money. One of the key tactics they recommend is finding what they call “teachable moments” to pass along golden nuggets of financial wisdom. This makes sense — kids have a lot to learn and must absorb vast amounts of new information every day. And they have an aversion to lectures from parents. So finding key moments to crystallize life lessons is critical to success.

But such moments appear and vanish again in the blink of an eye. To take advantage of them, you have to be well prepared.

This means knowing what you want to teach and being ready to talk about it when the situation presents itself. But it also means building some of the lessons into everyday life so they can be absorbed without the need for a long lecture. You might even manage to engineer a few teachable moments along the way.

For us, the whole plan boils down to answering two questions:

  • How do you get money?
  • What do you do with money once you get it?



In our family, we tie the concept of money to the concept of contribution. This forms the framework for answering the first question: How do you get money?

Children need to learn to take their place in the world as active and contributing members of society. To do this, they must understand how to look after themselves, contribute to their community, add value to society, and ideally create value to make the world a better place.

Based on a simple framework outlined in Robert Kiyosaki’s book Rich Kid Smart Kid: Giving Your Child a Financial Head Start, we break the concept of contribution down into four principles. We expect the kids to do tasks that align with each of these principles. A core concept is that we don’t pay kids just for looking after themselves and helping out with simple tasks around the house. Instead, we pay for completing specific agreed tasks. This way, we eliminate the traditional “allowance” of, say, $5 per week. For example, kids can complete five specific tasks at $1 each to earn the $5. The key is that the child is clear what exactly they are being paid for — and if the task isn’t completed, then they don’t get paid.

Principle #1: Personal Responsibility

Personal responsibility is about understanding that ultimate responsibility for how your life turns out lies with you. It starts with looking after yourself and involves learning many of the skills that will be required to do so in the future. Personal responsibility prepares children for independence.

Kids do age appropriate tasks for their own personal health and development. Tasks fall into the following general areas:

  • Personal hygiene
  • Cleanliness of personal spaces/cleaning up after yourself
  • Ability to feed yourself
  • Looking after your own things (toys, school bag, sports gear, homework, etc.)
  • Understanding how to use and manage money

Toddlers and pre-schoolers spend a huge amount of time on this area alone: toilet training, learning to brush their teeth, getting dressed, putting toys away, and making their beds. It progresses into making snacks or a simple breakfast of cereal, then into sandwiches, and eventually learning to cook a few different meals. The whole idea of teaching kids about money management is under the umbrella of this principle.

We don’t pay for tasks that fall into this category; from an early age, kids gain the confidence to do things for themselves.

Principle #2: Family and Social Responsibility

Family and social responsibility is about being a part of a community. For a community to work, all members must contribute. Family and social responsibility prepares children for interdependence.

Determine certain tasks that contribute to the family or community. Tasks generally fall into the following areas:

  • Setting and clearing the table before and after family meals
  • Helping with the groceries (help find things on the list at the supermarket, put groceries away at home)
  • Tidying common areas
  • Following house rules

If your kids have a similar program at school for being helpful in the classroom, then you can connect the dots. You can also ask kids to help out their grandparents or even volunteer to help out in the community.

The lesson is that, even as an adult, we have social obligations. It starts with following rules (e.g. road rules, the law, etc.) and extends to paying taxes and helping those in need. In The Art of Exceptional Living, Jim Rohn discusses how paying taxes “feeds the goose that lays the golden eggs.” Financial success is achieved within the context of a larger system. That system must be healthy and functioning. (I’m not suggesting that you don’t get good tax advice, and I’m certainly not suggesting that you pay more taxes than you need to pay. But neither should we avoid taxes.) The concept of charity also extends from here. For us, charity is about extending a hand to help someone back on their feet.

We don’t pay for tasks that fall into this category, either. This is about being a team player.

Principle #3: Adding Value

Adding value is about performing tasks that people need done — and are willing to pay for. It prepares children to be a contributing part of the wider economic landscape and social prosperity. In other words, it teaches the value of work.

Determine guidelines that describe what tasks or duties will result in payment. Children should participate in the decision of which tasks they will take on each week. The reality is that as adults, we do not get paid for chores around the house. At the same time, children need to learn what is involved in looking after a household, and you need some jobs that you can pay them for doing.

Related: 5 Ways to Use Real Estate Investing to Teach Your Kids About Finance

In deciding which tasks to pay for, we use this litmus test:

  1. Would it be reasonable to pay someone else to do this (e.g. house cleaning, laundry service, yard work)?
  2. Is the job really simple (e.g. putting away groceries, bringing in the mail) or a bit more work (e.g. mowing lawns, cleaning bathrooms)? Reward children for the harder jobs.

The key is to clearly communicate what you expect from your child. Then inspect the work to ensure that it is done to an appropriate standard. You may need to demonstrate the first time or two. After that, track completed work. Young children should be paid immediately to reinforce the connection between the work and the pay. Older children should wait for a weekly “paycheck” or, better yet, be required to bill you for their services.

This principle extends to working outside the home at the appropriate age.


Principle #4: Creating Value

Creating value is about encouraging a child’s entrepreneurial spirit. It prepares children for understanding what drives the economy and what leads to social prosperity.

Encourage children to earn money by solving other people’s problems. Help them brainstorm for ideas. Share stories of how other people (including you) have earned money in order to open and expand their minds to the possibilities. 

There is lots of room here for discussing the different ways in which people can earn money. Working for other people is covered by Principle #3: Adding Value. Some business ideas might still revolve around trading time for money, such as mowing lawns; others might lean more toward generating passive income, such as placing a candy machine in a club room and keeping it stocked.

The discussion isn’t just about how to make money, though. It’s also about training kids to identify a recurring problem and come up with potential solutions. They will also need to sell their solution and ultimately deliver results.

Kids that can master these skills before leaving home will have a world of opportunity available to them as adults.

Money Management

Once kids start earning, they need some guidance on what to do with a dollar. Again, we have four concepts to be taught — this time, it’s the four functions of money. This helps children answer the second question: What do you do with money once you get it?

The four functions of money are as follows:

  • Spend
  • Save
  • Donate
  • Invest

These ideas are not novel; you can even buy piggy banks that are divided into these four sections.

Introduce the lessons in a cumulative fashion over time, building on previous concepts. It’s important to note that the age boundaries are blurry. Some kids will struggle with certain concepts or, more likely, certain disciplines, and require a bit more time to practice. That’s fine. Just make sure that kids have enough time at each level to ensure that they absorb the concepts through extended repetition.

In addition, there are other important lessons that can be introduced and discussed along the way. A rough timeline looks something like this:

Ages 0-3

Kids are learning the basics of life, mostly in the area of personal responsibility and some family and social responsibility.

You can’t expect too much more than teaching kids to count at this stage.

Ages 4-6


  • Begin to develop a work ethic by assigning age-appropriate tasks.
  • Make the connection between working and earning money.
  • Develop a sense of workmanship; have pride in a job well done.
  • Pay immediately on completion of a task. At a young age, kids aren’t particularly motivated by things that might happen in the future. Ask them to do a job, ensure that it is completed, hand over the cash, and supervise it being deposited into the piggy bank.
  • Learn about what money is and how it is used to obtain goods and services. Go to the store and learn how to purchase something. How much do I have? How much does that item cost? Can I afford it? How much change should I receive back? Basic math applied to the real world. Teach your child how to interact with a store owner. Work with small, round amounts ($1, $2 rather than dollars and cents).
  • Money principle: When the money’s gone, it’s gone. If you spend your money, then you don’t have money to spend.

Ages 7-8

Spend. Save.

  • Continue the lessons from above.
  • Kids should be able to handle the math of dollars and cents.
  • By this age, you should be able to pay weekly. Try to be consistent and definitely keep track. Better yet, get your kids to keep track and invoice you.
  • Combat entitlement. Kids don’t receive an “allowance” — they only get the money if the job is completed correctly. 
  • Teach the fundamental principle of paying yourself first.
  • When you hand over payment, supervise kids putting some of that money into a separate piggy bank or jar designated for savings.
  • Set a savings goal. Is there a particular item that your child would like to purchase? Encourage them to set a medium-term savings goal and then go out and purchase the item.

Ages 9-12

Spend. Save. Donate.

  • Introduce the concept of setting aside money to give to those in need.
  • You can introduce the concept of giving at any point at which a child becomes curious about what some people have and others don’t.
  • You can prevent this from being a “feel-bad” lesson if you align it with a jump in how much money kids can earn, whether through doing more jobs or bigger jobs.
  • Ensure that there are opportunities for kids to give — whether through church, fundraisers that turn up at shopping malls, etc.
  • Provide opportunities to see mom and dad doing various things: budgeting, paying bills, giving, saving for specific big purchases, and investing for long-term.
  • Introduce concept of entrepreneurship. If they catch on, they might run with it.

Related: The Innovative Way I Plan to Teach My Kids About Real Estate & Building Wealth

Ages 13+

Spend. Save. Donate. Invest.

  • Within the bounds of your local laws, encourage kids to work outside the home to earn money from a source that is not their parents. This can be through getting a traditional job and/or through entrepreneurial efforts. Learn about income tax, working for other people, and minimum wage versus skilled or higher paid work.
  • Major savings goals during this time include:
    • Save for car.
    • Save for college/university.
  • Do a budget.
  • Have a checking account.
  • Teach how to manage money. Put money into their account for things like clothing, activities, etc. and require them to manage it.
  • Have them set aside a bit of money for an emergency fund to cover unexpected expenses. By high school, these will be turning up from time to time.
  • Try to strongly encourage some amount of entrepreneurship.
  • Teach them about investments. Because of some of the major items that kids have to save for, their ability to invest may be limited. If they have a job, perhaps they can start contributing toward a retirement account. Talk through the pros and cons of that. Discuss other investment types and your involvement in them. See what interests them and help them make some baby steps in that area, e.g. purchasing stocks or starting a small business. Explain how real estate investing works.


Start by paying kids in cash. While the world is becoming more digital, tangible money aids learning. During the high school years, you can transition to digital payment; at this point, kids can use bank cards for purchases.

Start with small amounts. A 4 to 6-year-old doesn’t need more than a dollar or two a week. This leaves room to grow later. Dollar stores are a great place to visit in the early years when you are working with small amounts. As we found out, even a $12 price tag will seem overwhelming to a child earning a dollar a week.

A 7 to 8-year-old might earn up to $5 per week. Make the shift in combination with teaching the “save” concept. Pay in a form that can be easily divided. If the child is earning $5, pay in $1 denominations and encourage the child to set aside $1 for savings. 

A 9 to 12-year-old might earn up to $10 per week. Again, make the jump in combination with introducing the “donate” concept and ensure payment can be easily divided into spend, save, and donate piggy banks.

Finally, don’t forget to set aside enough money in your own budget to pay your kids! Depending on how many kids you have and their ages, this could start adding up.

Teachable Moments

We had our first real teachable moment when our eldest was just 5 years old. We were in a store, and she saw something that she really wanted for $3. After some discussion, my wife said that she would purchase the item, and my daughter could pay her back with the money in her piggy bank when we got home. Once home, my daughter opened her piggy bank and counted out the money. It was all she had. Tears welled up in her eyes as she looked at my wife and said, “I don’t have any left.” Needless to say, it’s a tough lesson for a 5-year-old but one better learned at age 5 than at age 35.

Related: Teaching Kids to Be Entrepreneurs is Key to Addressing the Wealth Gap: Here’s Why


There’s a lot here to consider, but you don’t want to overload your kids either. The idea is to strike a balance to ensure that kids are learning the key lessons in a consistent manner without making life all about work — or money.

As Ramsey and Cruze point out, your kids will learn a lot just by watching you. Ensure you have your own financial house in order and try to include your kids in certain aspects from time to time. They don’t need to know every detail of your finances. But anything you can teach your child now will be a valuable insight as they learn to manage money for themselves.

Ultimately, you want your kids to leave home with the tools they need to be successful in life. This doesn’t mean that they will agree with all your ideas nor will they make all of the same decisions that you would make. But with the knowledge and years of experience with different approaches to earning, saving, donating and investing money, they will have the tools they need to apply to their own lives as they see fit. Applying the principles of wealth building could allow children to achieve financial independence by age 40 or potentially even earlier. Perhaps the most important lesson of all is that each of us is in charge of our own financial futures; a life of abundance is within reach.

How do you teach your kids about money?

Let’s discuss below!

In 2013 Brad awoke from lifelong financial slumber and took responsibility for his family’s financial future. His primary vehicle for wealth-building is buy-and-hold real estate. He is passionate a...
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    Michael Williams Investor from Palmetto, Georgia
    Replied over 3 years ago
    Outstanding article. When I saw the title of the article I was eager to read the article and put my 2.5 cents into the discussion. I must say that I am happily disappointed. You covered everything. Since the education system is very much lacking the the area of financial education it IS our responsibility as parents to plant this important an vital concept into our children. I can point the finger at the system for failing my children in this area but the finger pointing is not going to deliver to my child the lessons needed to create the abundant life I want for them. So I must step up to the plate and make it happen with a plan of execution like the one you’ve laid out. Either we take the responsibility or we will keep getting more of what we are getting. Excellent article. I still add my 2.5 cents; didn’t I?
    Brad Lohnes Investor from Cambridge, Waikato
    Replied over 3 years ago
    Hi, Michael. Wow, thanks! I’m really glad you enjoyed it and I hope it’s useful! I agree 100% that finger pointing doesn’t get us anywhere. I see it all day long. Anyway, thanks for your comment!
    Sam White Rental Property Investor from Dallas, TX
    Replied over 3 years ago
    Great read. I grew up in the same environment as you. I awoke to financial freedom my junior year of college when I was evicted and without a home for 3 months. Thank you for the road map. Kids may be years down the road, but I’m printing this article and putting it folded in a book, I know I will open years from now.
    Brad Lohnes Investor from Cambridge, Waikato
    Replied over 3 years ago
    Hi, Sam. Thanks for reading and for leaving a comment. You must be stoked that you figured it out at a young age. It took 2 kids and 3rd on the way for me to get things sorted. 🙂 Best of luck!
    Brad Lohnes Investor from Cambridge, Waikato
    Replied over 3 years ago
    Hi, Isha. Thanks for reading and for leaving your comment. I really appreciate it. I hope you find the post useful. Cheers!
    Chris Lewis from Ashland, Massachusetts
    Replied over 3 years ago
    Thanks Brad, Great article, it’s one I’m often confused on how to broach with my two boys (4 and 6) and I couldn’t agree with everyone more that it’s not touched in the school system. I grew up in a household where money was coveted but NEVER discussed on how to handle it. I’m not sure if I saw it as this mystical object and therefore sought after it like the all powerful object I thought it was, or all the fighting it caused between my parents making every dollar received from them having a fee of my guilt in return, but I was always trying to figure out ways to get my own, buying and selling items on ebay, small jobs from a learned skill, etc. The problem was that once I had it I didn’t know what to (responsibly) do with it. A very scary thing to learn on your own once your safety net is gone as an adult. For my own children, I want them to have that same spark I did about trying to make money, and just as importantly, I want them to know what to do with the money they make, realize that it doesn’t grow on trees (or in dad’s wallet), and that they have responsibilities that cannot be seen everyday. This article has definitely given me some great ideas on how to keep discussions open on the topic, but there is so much more to discuss that I stumble on where to draw the line. For example, we’re currently buying a house and my boys see the amount of effort we are putting into the decisions we make. My wife and I don’t fight about money, but we do discuss at length how we should move forward, weighing our options. So understandably, they ask “why don’t you just buy it?” or some similar basic question. Excellent question, but where do I draw the line as to keep them interested, but not flood them, bore them, or overwhelm them? Should I tell them that the house costs $350k and how much our income is so they can see the working behind it, or chalk it up to “it’s a lot of money” and end the conversation? Obviously there is middle ground to that, but I’d love to know what others think on where they draw the line for debatable discussions on investments, major purchases, and strategies. -Chris
    Brad Lohnes Investor from Cambridge, Waikato
    Replied over 3 years ago
    Hi, Chris. Thanks for reading and thanks for your comment! I understand where you’re coming from. I agree that there is a lot to discuss and obviously a post on a website can’t possibly cover it all. I think how much you want to share depends on age. We do share a fair amount with our kids but understand that at a young age (e.g. 4 and 6) they don’t have a strong frame of reference. Kids that age can’t really grasp how big $350,000 is. I think the “it’s a lot of money” conversation is fine at a young age. Obviously, as they get older, you can get more into detail. Using a mortgage calculator to work out how much payment would have to be made every month can be a great way to give older kids a bit of a shock. 🙂 This even works with smaller amounts, like how much it costs to heat the house every month or how much it costs just to feed the family.
    Doug Seabury Real Estate Agent from Vail, Colorado
    Replied over 3 years ago
    Nice article, it definitely found it very useful as parent with 2 kids. I believe the sooner we start teaching our kids money the better it will be in the long run. By the time they’re adults they are fully functional with money. Thanks, I took some new things that I wasn’t aware of!
    Brad Lohnes Investor from Cambridge, Waikato
    Replied over 3 years ago
    Hi, Doug. I’m glad you enjoyed it and that you found some new info in there. I think that the key is to ease kids into it throughout their formative years. Money shouldn’t be this big mystery when they reach adulthood – it’s just a tool. An important tool, but a tool nevertheless. Cheers.
    Jerome Lewis Jr Real Estate Agent from Philadelphia, PA
    Replied over 3 years ago
    Brad, this was an amazing article. Thank you so much for sharing. I admire the effort you put into this well-structured article. It’s very practical and a very useful guide.
    Brad Lohnes Investor from Cambridge, Waikato
    Replied over 3 years ago
    Hi, Jerome. Thanks for reading and thanks for leaving a comment. I’m really glad you got something useful out of it. 🙂
    Vikram Sharma from North Brunswick, NJ
    Replied over 3 years ago
    Brad, thanks for sharing such an excellent article. I can relate very well to this article as I wasn’t taught these lessons to manage and handle money while growing resulting in splurge when I started to earn. Whereas my wife has very strong habits about money management as she was taught these lessons while growing up. Now, we are teaching our kids these values so they go prepare when they are out on their own. Thanks again for sharing such a wonderful article !!
    Brad Lohnes Investor from Cambridge, Waikato
    Replied over 3 years ago
    Hi, Vikram. Thanks for reading and sharing your experience. I was (still am) a “spender” and my wife was a saver, but neither of us really knew what to do with money. We figured it out and now we’re on the right path, but very much hoping that our kids will have that strong foundation. Cheers!
    Bryan O. Specialist from Littleton, CO
    Replied over 3 years ago
    A couple of thoughts that have helped me. When my daughter was young (5’ish) we played children’s monopoly. This taught her basic expense/spend and income. When she was 6+ we started playing Cashflow for Kids. This teaches her active/passive income, expenses, and different categories of investments. Now she knows quite well at 8 what an asset is and what a liability is. She also gets 2 forms of paycheck: w2 worker and entrepreneur. She receives $1 per year old per week (so $8/week right now) for doing her standard life duties: keeping the room clean, helping set the table, whatever. This divides up into her spend, save, and donate jars (I need to add one for investing!). She also has the ability to identify larger tasks that need to be done that are not her normal responsibility and negotiate payment. This teaches her not to be an employee, but that she can make as much as she can solve. We just contracted to build a custom wood table/bench this week for a customer so the daddy/daughter team will be learning more side-hustle and self-employment. She’s going to get a huge amount ($100’ish). tl;dr: I love what you wrote, though I think many of the age-specific stuff is way off. Teach them at every age you can and they will learn different depths of lessons. Teach them that working based on time is one way and that working based on results is another. Great article!
    Brad Lohnes Investor from Cambridge, Waikato
    Replied over 3 years ago
    Hi, Bryan. That’s great! It sounds like your daughter is off to a lightning start. 🙂 The ages will depend upon each child. I can’t imagine our kids playing monopoly right now, let alone cash flow. But it depends on the individuals. Grabbing their attention can be tricky, so I’m personally not keen to push too hard. They don’t need to be millionaires by the time they leave home. 😉 We just want to layer the concepts on year on year so that once they leave home they are comfortable with money management and it’s not a big deal. Thanks for your comment!
    Mike Dymski Investor from Greenville, SC
    Replied over 3 years ago
    Good stuff Brad and Bryan. With your skills, you could consider helping adults too…at work or church…lunch and learn type thing on personal finance or maybe junior achievement. Your kids are going to know more than most adults, who can’t balance a checkbook or understand a mortgage. Most people won’t change but a few will and it will change their lives. Well done.
    Brad Lohnes Investor from Cambridge, Waikato
    Replied over 3 years ago
    Hi, Mike. Thanks for reading and leaving a comment. I do also write articles for adults; feel free to check out my other articles here: 🙂 But yes, I’m also keen to help groups of people but you have to be careful with legal concerns. I’m looking into getting that stuff sorted but for now happy to share my experience. Cheers!
    Robert Steele Investor from Lucas, Texas
    Replied over 3 years ago
    Why is it that schools don’t teach financial literacy? I’ve read that schooling changed during the industrial era where it was no longer about critical thinking but about producing workers. Could it also be that schools are designed to create debt slaves? My parents never really taught me anything about money. I didn’t get an allowance and I didn’t get paid for mowing the lawn or washing the car. My parents were very frugal and that rubbed off on me. There are a few phrases I remember my mom repeating to me. Look after the pennies and the pounds will look after themselves. (A reference to English pound sterling no doubt). Never a lender nor a borrower be. (Of course I figured out later that debt to finance an income producing asset is OK).
    Brad Lohnes Investor from Cambridge, Waikato
    Replied over 3 years ago
    Hi, Robert. I’m not sure. I read the same as you (probably Robert Kiyosaki?) but I don’t have too much more explanation on the why. I do know that the education system is extremely resistant to change. This of course makes it difficult to introduce new content. I also read somewhere that part of the problem is that most teachers don’t feel comfortable with the subject matter. I don’t know why that matters – just hire people who are comfortable with the material. Anyway, thanks for your comment!
    Andy H. Investor from Stockdale , Texas
    Replied over 3 years ago
    Excellent article filled with lots of practical application! In some ways, I cringe at the thought of what it would be like if public schools did teach about finance. Probably just the typical “work hard, save your money and someday if you are lucky you’ll have enough to retire”. If there was anything taught about investing it would probably be through the stock market.
    Brad Lohnes Investor from Cambridge, Waikato
    Replied over 3 years ago
    Hi, Andy. No joke – I can imagine the arguments about what the actual content should be. And yet, it really isn’t that hard to just cover most of the important stuff. Seems more important than some of the material I learned in school – and promptly forgot!
    Sean Smith Real Estate Agent from Sacramento, CA
    Replied over 3 years ago
    Absolutely love this article! I don’t have children right now, but this will be endlessly helpful for when that day arrives. Thanks!!
    Brad Lohnes Investor from Cambridge, Waikato
    Replied over 3 years ago
    Haha! Thanks, Sean. I hope you can find it again when you need it! Cheers.
    Candace Harrison Real Estate Investor from Chicago Heights, Illinois
    Replied over 3 years ago
    Awesome article Brad! I’m a mother of four and I’m also an aunt. When I saw the title I had to read it. It’s very informative. This article is a must read for everyone not only parents. It’s children in every family and community that can benefit from this. Thanks for writing it!
    Brad Lohnes Investor from Cambridge, Waikato
    Replied over 3 years ago
    Hi, Candace. Thanks for reading and leaving your comment. I’m glad you enjoyed it and found it useful! Thanks!
    Brian Woods
    Replied over 3 years ago
    I think that Saving is number 1, with investing as a sub-set. Teaching spending first is why so many people don’t even have $1000 in the bank. Schools don’t teach his because the people that decide on the curriculum don’t want the competition. School boards will tell you that they have consulted with business leaders in what is needed for the jobs of the future. Business leaders want docile workers who are in debt and must come to work and keep their jobs so as not to be out on the street. The internet and sites like this educate people but they have to want to learn something and apply the lessons. The rules of money are constantly changing so financial education is important. Teach kids to donate wisely and find out where the money goes. Giving to some organizations may make you warm and fuzzy until you find out that only 10 cents of your dollar went to the cause and 90 cents went to pay for bloated salaries and more fundraising. Teamwork is great as long as everyone pulls their weight, but you also have to teach kids what to do when someone isn’t. Schools teach teamwork by doing group assignments where the teachers will put a low performer with a high performer knowing the high performer will do all the work.
    Brad Lohnes Investor from Cambridge, Waikato
    Replied over 3 years ago
    Hi, Brian. I hear what you’re saying. You make some great points. Keep in mind we’re basically talking about 5-year-olds when “spend” is introduced. At that age, kids aren’t great at stuff that happens in the future. It’s too hard to envision. So saving is tricky. It’s tricky at older ages too but it does have to start somewhere. As long as it starts very early it won’t ruin kids financially forever to have learned spend first. And when I refer to teaching “spend”, you’re really just teaching everyday use of money and even what money is. Our younger kids don’t even get the concept – and don’t want to work for money because they don’t know what it is. That has to be taught and so it logically comes first. Addition and subtraction, basic concepts like “can I afford it?” Anyway, thanks for your thoughts and thanks for reading!
    Joshua Diaz Rental Property Investor from Bronx, NY
    Replied over 3 years ago
    Wow what an awesome article! I wish I had something like this when I was growing up. And ditto on the comments about schools. The only financial education I remember from school was a simple afterthought about the stock market and not a dedicated class on finances.
    Brad Lohnes Investor from Cambridge, Waikato
    Replied over 3 years ago
    Hi, Joshua. Thanks so much for reading and sharing your thoughts!
    Jeremy M. Investor from Advance, North Carolina
    Replied over 3 years ago
    Great article! Like so many….I grew up in a household that coveted money, never discussed money, and had no idea how to invest money if we’d had it. Came to grips with that in my early 30’s and have been trying to implement the basics ever since. We’re teaching our 9 yr old some of the same concepts you’ve outlined. We’ve tended to go pretty heavy on the saving and giving side. The spending comes naturally enough for most! Let’s just say it’s been an interesting journey! 2 thumbs up!!
    Brad Lohnes Investor from Cambridge, Waikato
    Replied over 3 years ago
    Hi, Jeremy. Thanks for reading and sharing your experience. With all of the people learning about money and teaching their kids, you’d hope for a better financial future. I wonder if it will matter! 🙂
    Ashley Wilson Rental Property Investor from Radnor, PA
    Replied over 3 years ago
    Great read! I grew up in the same environment as you, and with an almost two year old I have already started to think about how I will include teaching about money into her development. Thank you again for taking the time to write this!!!
    Brad Lohnes Investor from Cambridge, Waikato
    Replied over 3 years ago
    Hi, Ashley. Thanks for reading and sharing your thoughts. Good luck passing along money lessons to your little one! 🙂
    Charissa Gregory Investor from Tahlequah, Oklahoma
    Replied over 3 years ago
    Great article! Thank you for contributing such a comprehensive article and for bringing awareness to the need to start educating youth on monetary practices. One day I hope to see financial education in school curriculums.
    Megan Smith from Reno, Nevada
    Replied over 3 years ago
    Excellent article! I love the concept of looking for teachable moments to pass along golden nuggets of financial wisdom. I do this with my kids in hopes of it sticking as they grow older.
    Dave Visaya Audio Engineer and Investor from Cebu City, Cebu
    Replied over 3 years ago
    I totally enjoyed this, thanks for sharing Brad! This really helps when I have a kid someday. But, most importantly these core concepts could be learned at an early age– the best time to learn anyhting.
    Zachary C. Property Manager from Huntsville, AL
    Replied over 3 years ago
    This is really good stuff! I don’t remember all the stuff my parents did to teach me about money at that age, but they must have taught me some of it. I definitely worked for my “allowance” and had to get regular jobs anytime I wasn’t involved in sports. Perhaps they didn’t cover investing, since I started figuring that out on my own later in life.
    Account Closed Rental Property Investor from Portland, OR
    Replied over 3 years ago
    Love love love this! Thank you. Question: What do you do when the ex is modeling irresponsible money habits and buying the kids expensive gifts (for no particular reason) on the days when you don’t see them?
    Jason Baron Investor from Quincy, Massachusetts
    Replied over 3 years ago
    Great article! It’s unreal that something as important as financial literacy isn’t taught in school!
    Sarah Melton from Akron, OH
    Replied over 3 years ago
    Loved all of the ideas. I just can’t get enough of this topic because I agree that I can’t and wouldn’t want to rely on the school system to teach my daughter about finances. I see the value in parenting this way a 100% through but it does feel weird because it it different than how I was raised. So that’s why I love reading as much as I can about this topic to reinforce this type of parenting. Thanks for the article!
    Skyler Massey Investor from Vernal, Utah
    Replied over 3 years ago
    Great stuff! Thanks for the insight and all of the ideas. This article will be a good reference for me as I raise 3 money smart kids. Thanks!
    Reginald Hunter from Dallas, Texas
    Replied almost 3 years ago
    Thanks Brad. This is awesome. I read the Dave Ramsey books but was hit our miss on some of the application, especially the age distinctions. This blog is a game changer.
    Rob Lenderman from Bellevue, Washington
    Replied over 2 years ago
    We have a bit more complex program. I created a “contract” with my kids signed and everything that outlines everything we expect from them to get their allowance and highlights other special projects that pay separate. For instance I pay $5 to wash the car because I will pay someone else or the carwash at the gas station. They get the allowance for clean rooms, dishes, clean living rooms, own laundry, etc. That allowance is high($35/wk) BUT they are required to pay for everything on their own. They buy their own clothes, shoes, lunch with friends, movies, etc. I ONLY buy them meals as a family, sports related gear or books. I give them $100 to buy school supplies(They end up only spending $50 because they keep the remaining). So the results? I never do housework, they never ask me for money to buy things, they work hard at the extra tasks and are always asking how to make more through new things.
    Tom Cyr Flipper/Rehabber from Grand Prairie, TX
    Replied over 2 years ago
    Brad your article is very well organized. I too took that engineering economics class my senior year in college. I look back at it as my first exposure to finance. I wish I had paid attention. Unfortunately, my financial interest laid dormant for another 20 yrs until Rich Dad Poor Dad. Now I’m trying to make up for lost time. I never got into bad debt and started house hacking with my first home in the 80’s so I didn’t have a hole to dig out of. I’ve even raised my kids with a keen interest in finance. We play Cashflow occasionally and they definitely know the importance of financial literacy. They seem to be on track but I would like to get positioned to take a bigger role in the culture to close the gap between the rich and the poor. I fear that it could come down to the difference between the wise and the foolish, which will mean that there is not much we can do to help. But if just 10% are willing but ignorant, we can shape the future if we coach or become financial literacy educators. Thank you again for a very comprehensive article.