7 Financial Lessons Your Kids Won’t Learn in School

7 Financial Lessons Your Kids Won’t Learn in School

March 19, 2024

Although America is a capitalist society, talking about money has long been an unspoken taboo. Yet being more open about money around children can help them become better managers of their finances.

A 2023 study found that 62 percent of Americans don't talk about money. However, it appears that the taboo is beginning to disappear, as Millennials and Gen Z are twice as likely to say they’re an “open book” on money topics, compared to older generations (28 percent vs. 13 percent). Many people would rather discuss politics (43 percent) and death (32 percent) than their finances (24 percent).

And, while talking about money around your children opens the door for them to learn how to develop good money-management habits, research also shows that parents need to do more than just talk about money; we need to give kids hands-on experience managing it. This means allowing kids to oversee their own money and to practice making financial decisions.

A recent study from BYU revealed that children who learned from experience are more likely to be confident in making financial decisions in young adulthood. Parents doing a good job of teaching their children about money is linked not only with financial outcomes but also with mental health outcomes in young adulthood.

Here are seven ways to help children become good money managers from a young age. You can adapt these strategies as needed so they are age-appropriate.

1. Use storytelling to bring money lessons alive for children

Storytelling has been an effective communication tool since the beginning of time, and it can help you teach your kids about money.

For example, ask your children what they could do to earn money. Brainstorm ideas with them. If they suggest starting a lawn-mowing service, for example, ask them what types of tools and other resources they’ll need to start the business. If you don’t have a lawn mower at home, show them how to research prices online.

Show them how they might save money by buying a refurbished lawn mower or by purchasing a mower, a rake and other tools at garage sales or estate sales. Then help them see what people in your neighborhood are charging for this service so they can price their services competitively. Show them how to set themselves apart in some way — for example, by mentioning in their ads, flyers or social media that they always sweep the sidewalks after they mow.

2. Teach them the value of a budget

Many adults could improve their financial situations by setting and following a budget. Budgets get a bad rap because they tend to make people think of scarcity — that they have to give something up. Chances are, that’s true to a certain extent, but in many cases, when people look through their checking accounts and credit card accounts to find out just how much they’re spending, and on what, they find expenses they can get rid of easily. For example, many people are being charged for online subscriptions they never use.

Teaching your children to set and follow a budget will help them develop good financial habits that will carry them into adulthood. To accomplish this, put your kids in charge of grocery shopping once in a while, if they’re old enough. Give them a certain amount of money and a shopping list. Show them how to prioritize and to choose generic brands in some cases.

You can find budgeting tools, such as Mint or Quicken, that aggregate your children’s accounts and help them track spending. This can show them where their money is going. Encourage them to set savings goals for bigger-ticket items they want. This exercise will help them understand, and appreciate, the concept of delayed gratification — doing without something they want now so they can get something even better at a later date.

3. Set expectations for how they use their money

If you give your children an allowance, guide them on wise ways to use that money. Again, have them get them in the habit of tracking their spending by building a budget. Set an expectation for how much money they can spend, how much they need to save for the future and how much to donate to a church, synagogue or charity.

Moonjar is a kid-friendly tool that teaches kids how to manage their money by dividing it into those three categories. The Moonjar has three coin slots: one labeled “spend,” another “save” and a third one called “share.”

4. Show them how you make financial decisions

Our kids watch us closely, even if it doesn’t seem like it sometimes. One of the best ways to teach your children how to manage money is by being a great money role model.

Make it a habit to model good financial behavior. For example, if you and your spouse want to buy a newer vehicle, but your family also wants to take a big vacation this summer, talk with your children about how you are managing these dual priorities.

They will learn a lot just by hearing you say, “I want that new car so much, but we just can’t afford that and the vacation right now. We will save an extra two hundred dollars per month, and maybe we can get it at the end of next year.” Teach your children to practice discipline in their spending by doing so yourself.

5. Encourage your children to resist peer pressure

Children of all ages face peer pressure to have what everyone else has, both at school and on social media. This can make it easy for them to get caught up in comparison. If your children don’t recognize this issue and deal with it early on, with your help, it can set the stage for them to spend the rest of their lives trying to “keep up with the Joneses.”

Talk openly with them about deciding for themselves what they want and need and ignoring what their peers are saying and doing. This is one of the most valuable real-world lessons you can give them while they are still living at home. By the time your children get to college or in the workforce, you want them to be able to resist that type of pressure and make their own wise decisions.

6. Teach them the difference between saving and investing

You want your children to learn the value of both saving money and investing it, but you also want them to know the difference.

One of the most effective ways to teach this lesson is to open a bank account for each child. Show them how their money can earn interest and “grow” over time, thanks to compound interest. Teach them why it’s important to have both a checking account for everyday expenses and a savings account for unexpected expenses in the future. Once they get comfortable with depositing money into their accounts and seeing how their balances change over time, then you can teach them about investing in the stock market.

7. Help your children understand debt

Another critical lesson in your children’s journey toward being good money managers is understanding debt. Whether or not you get your children their own credit cards and monitor them, help them understand how high interest rates can be damaging if they carry balances on their credit cards.

Help them understand the benefits they can get by using credit cards, such as convenience and qualifying for rewards, but let them see how much debt can erode the money they’ve worked so hard to save.


Legislators and educators in the United States are beginning to realize the importance of teaching students about financial management in school. We have made a lot of progress in this area.

Since 2020, nine U.S. states have passed laws or policies requiring schools to provide personal finance education before students can graduate from high school. The U.S. nonprofit organization called the Council for Economic Education says 30 states now have such policies in place.

We still have a long way to go, however. And even if the schools in your communities teach financial education, the best way to ensure your children learn how to manage money well is for you to teach them yourself by creating opportunities for hands-on money management.

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