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


It’s never too early to start imparting wise money ways to the next generation. Teaching children about money can be a challenge. Ask me how I know this! I have five children, and several already have a firm grasp on the concept of spending money. I am having a little more difficulty helping them grasp the saving, investing and growing concepts…

There are plenty of philosophies on how best to educate and responsibly teach kids about finance. Some earn money through chores. Some have a weekly or monthly allowance. Others have checking accounts set up at early ages and are taught to keep a register so they are always aware of their balance. Some pay a small fine for trespasses, from slipping with a swear to putting bugs in their older sister’s bed. So on and so forth. All of these are good and noble ways to teach kids about the connection between work and money, as well as the consequence or cost of actions.

Even as real estate investors, teaching our children how to handle money responsibly isn’t easy. Money and finances can be complicated — but that doesn’t mean we can’t use our wisdom from investing in real estate to impart good principles for the future of their money management.

I am sure that there are many readers on here who do the same things that I do, particularly when it comes to real estate investing and involving your kids. My kids go with me to the houses I am renovating. They go with me to check on the houses, review the job site, meet with the contractors and even visit the bank. They are in the middle of watching and learning what I do, but the money side of it is tricky.

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

I don’t want them to think money is just growing on trees, but there are a lot of things that they need to learn and there are steps to take on that road. I wouldn’t say that it is step by step, but there are definitely easy concepts to more advanced concepts, and these are 4 essentials I think my kids have to understand. While these tips primarily target younger children, remember that you can always impart your financial wisdom, whether you’re talking to 12-year-olds and teenagers or your grown children.

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5 Ways to Teach Your Kids About Finances

Start With Savings

After settling on an appropriate and reasonable allowance for your children, use it as a tool to teach them how to save. You can start by simply refusing to fulfill an immediate impulse when your child doesn’t have the funds to make a desired purchase. Make them wait until their next allowance. By the same token, teach them about setting money aside. They can start to learn when something is worth dipping into their savings for — and when it isn’t.


We use glass jars that are visible on the counter, and it helps them to have an understanding about how much they “have.” That is a good thing for children and easy to understand and start developing a healthy understanding of “how much” is a lot.

Make Buckets

U.S. News Money recommends a bucket method for kids. Require your children to split their allowance into four “buckets”: charity, savings, investing and spending money. Require that that allowance be divided in some way in all four buckets. Talk through their financial decisions with them and stress the value of empathy and giving as much as the value in delayed gratification and the principles of compounding.

Delay Gratification

This is a great place to throw this one in because it is so important in today’s society. Everything is instant gratification. and so much of the recent research into millennials shows that the most recent high school and college graduates have a tough time respecting time. They are used to having everything now. They want to be the boss now. They want the house, the cars, the bling and the latest and greatest of everything and they want all of it now.

The best thing we can do is teach our kids to wait. Be happy and satisfied with the time it takes and the work it takes to get your goals. The reward of that goal is worth the wait. So, speak with your children about the need to wait and delay their gratification.

Learn Balancing and Budgets

From the buckets, children must learn the relationship between earning, spending and saving. Can they afford to dip into their savings for something? Is it worth the trade-off? In time, they can learn how to balance a checkbook and develop a personal budget. Teach them, then let them try out financial concepts in real life. In time, they will develop an appreciation for the value of money and how to wield their capital responsibly.

As for real estate, share with them your budgets on your properties. Show them the rental deposits and the mortgage payment. Help them to understand the difference between the two and the fact that one gets paid whether or not the other is collected!


Related: BP Podcast 095: Multifamily Investments, Partnerships, and Raising Your Kids to Be Entrepreneurs With Curt Bidwell


It doesn’t have to be a big investment. Some children may not be ready for it, and looking at stocks and everything involved may be overwhelming to them. Introducing them to mutual funds and teaching them how to follow stocks, however, can be a valuable step to raising financially-savvy kids. For me though, I would rather let my kids get involved in a real estate deal. Let them purchase the light kits for an investment property, and pay them interest on their money. Let them cover the cost of a particular line item in your budget, and then pay them accordingly.

Speaking of investing, teach them the value of investing their time and not just their money. You may just be bringing up the next great generation of real estate investors. They are going to need to know how to manage not only their dollars, but their time as well.

Let them try. Involve them. Even if the concepts are simplified for their sake, you can explain to them how investing works and how it can grow their money for the future. There’s plenty kids can learn from you about money. Don’t let them get to their senior year of high school before they take a personal finance class. Use what you know from investing in real estate to build a solid education for their future.

Instill good money sense early. In the end, it will pay off.

What was the most valuable piece of financial advice you received when you were young?

Share with us in the comments.

About Author

Chris Clothier

In 2005, Chris Clothier (G+) began working with passive real estate investors and has since helped more than 1,100 investors purchase over 3,400 investment properties in Memphis, Dallas and Houston through the Memphis Invest family of companies.


  1. Mark B.

    Great post! Instead of an allowance I have the kids earn all the $ – even if it is for household chores – some are because they are part of the family and others are to earn and divide upas you describe. I really like your suggestions of them buying something for the rental to earn a return!

  2. Lorene Fleming

    What a great article, Chris, my kids are grown now, but still applicable! I wish I would have thought of these tactics when they were little! Thank you for the great ideas! I do involve them in the process of looking for properties now though and also when we were rehabbing!

  3. Shaun Reilly

    This is something I have been thinking about more lately.
    My oldest is getting to the age where I think I can start to use some of these concepts (just past 6.5).
    I like the jar methods though I never understand why you never see a “Tax” jar.
    While we will do our best with them they might never save, never invest or ever give to charity but if they ever work they WILL pay taxes.
    For every dollar take $0.10 back (Being nice:) ) but DON’T tax the investment gains and give them a break for the money they give to charity.
    Might take a little while for the little ones to pick up on it but once they do I think the lesson of you can’t just work for money but you need to invest, and should be generous, will hit home hard.

  4. Robb Almy

    Thanks for the great article Chris. I have heard some of these things before but I have always struggled with the question about how to teach my children about the investing piece. I really like your idea about letting them buy into one of your own investments by line item and paying them interest. That is a great solution. Good stuff!

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