5 Ways to Be a Great Money Role Model

5 Ways to Be a Great Money Role Model

February 26, 2024

Chances are, you learned how to manage money on your own, by trial and error. Most of the clients we work with have had little to no formal training in financial management. The good news is that this is changing; 25 states now require high school students to take a financial literacy course before they can graduate.

The best place for children to learn about the value of money, and how to manage it, is at home. And, because kids often tune out their parents, the best way to teach children about money is by showing them — by being a good money role model.

Kids notice everything. The best lesson you can give them in financial management is to be a great steward of your own finances. This can mean working with a financial advisor who will develop a customized financial plan for you, maintaining an emergency fund to pay for unexpected expenses, managing debt and following a family budget.

Here are five additional ways to be a great money role model for your kids.

1. Show kids the difference between wants and needs

Because most children have their own phones, they are heavily influenced by what their peers own and do. According to Consumer Affairs, 95 percent of kids who are 13 to 17 years old own a mobile phone. On average, children get their first phones at 11.6 years old. The sharpest increase in kids getting a phone happens between 10.7 and 12.5 years of age. By 15, almost all children have a cell phone.

When the kids in your child’s social circle determine that it’s essential to own a certain brand of sneakers, coats or toys, you’re most likely going to receive constant pressure to buy those things. Because giving in to their demands will set a precedent for the future, it can be a good idea to push back.

Peer pressure can be severe for kids who want to fit in with their friends. The bigger lesson here is to show them that their self-worth has nothing to do with material possessions. Teach your kids the difference between wants and needs. If kids do not learn this lesson early on, that peer perssure is likely to hound them through high school and college and into their young-adult years, when they feel pressure to buy the same types of homes and cars their friends are buying.

Managing your children’s expectations early on will go a long way toward guiding them to make financial, and other, decisions based on facts, and needs, instead of peer pressure.

2. Demonstrate the benefits of delayed gratification

You don’t have to tell your child “No,” but you can get a lot of teaching mileage out of “Not yet.”

Teach your child about delayed gratification. Often, when new items hit the market, they’re more expensive at first, and then the prices often decrease. Show your child how to track prices on the item he or she wants.

Discuss your own experiences with your child. For example, if you are looking to buy a new car or an airline ticket or something else, show your child how much money you can save by waiting a little while to make that purchase.

3. Let them learn by doing

Let your children experience what it’s like to “manage” money by giving them opportunities that are age-appropriate.

Just as you might base your kids’ allowance on different household chores based on their age-related abilities, you can give them opportunities to learn about saving and spending in ways that are age-appropriate.

For example, some parents teach their children that for any type of money they receive, they need to save most of the money and donate some to a good cause, and they allow their children to spend a certain amount. If your child receives $50 as a birthday gift, talk with him or her about how to make sure some of that money gets into each of the three “buckets.”

4. Include your children in family discussions about money

Many parents attempt to shield their children from discussions about money. This isn’t doing anyone any favors.

The amount of money you earn, your mortgage payment and other financial facts of life should not be a mystery to your kids. When they are old enough to understand, start sharing details about your income — how much you earn, what you pay in taxes, how much you're setting aside for retirement and what you have left over to spend. Being open about money will help your children better understand how to manage it later on.

Show them how high interest rates can add significantly to the cost of a purchase if credit cards aren’t paid off immediately.

Include your children in some money-related discussions. For example, if you and your spouse are planning a family vacation, let your children offer their ideas for places to go and things to do. You don’t have to agree to all of them, of course. But these discussions can offer valuable teaching moments. As you discuss options, your children will be able to see that some vacations and activities cost more than others.

As your children get older, you can ask them to pay for their own activities. You might give them some money and let them decide which options will end up giving them the most value for their money. Or you can encourage them to earn a certain amount of money and then match their earnings.

Making your kids a part of the discussion can help them see the importance of prioritizing choices, planning ahead and maybe even negotiating prices.

5. Let them make mistakes, and own up to yours

As with anything in life, we learn more from our mistakes than from our successes. So it’s important to allow your children to make mistakes and learn from them. When you teach these lessons early in their lives, they will be less likely to make costly financial mistakes later in life.

Also, admit to your children when you’ve made a financial mistake. They will learn volumes from the way you handle any missteps. By showing them why the action you took ended up not being ideal, they will learn that everyone makes mistakes, and they will learn how to regroup and learn the lesson from the situation.


Your kids are watching you! They might not admit it, and they might not seem to be listening to you, but they are learning from the example you set. The greatest gift you can give them is financial literacy. And the best way to teach them is to be a great money role model.

Any opinions are those of the author and not necessarily those of Raymond James. This material is being provided for informational purposes only and is not a complete description, nor is it a recommendation. There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct. Investing involves risk and you may incur a profit or a loss regardless of strategy selected. No investment strategy can guarantee your objectives will be met. Past performance is no guarantee of future results. Prior to making an investment decision, please consult with your financial advisor about your individual situation.