15 Things Your Kids Need to Know About Money

by Jamie Simmerman · 6 comments

Mother and daughter with piggy bank

Teaching our kids to effectively manage money is essential. Kids with good money management skills grow up to be adults with excellent money management skills, and those adults will be leading our country someday.

Leaving an inheritance for your kids isn’t enough — they must know how to manage the money, or they’ll likely end up wasting everything you worked so hard to save up for them. Teaching kids about money is an intentional process. Unless you make money skills a priority, you aren’t likely to succeed. You need to create a plan for financially educating your children.

Here are 15 things every kid should know about money — hopefully these skills and beliefs will stick with them for life.

15 Things Your Kids Need to Know About Money

1. Money isn’t magical. While Uncle Fred may pull a quarter from behind your ear, money doesn’t magically appear or disappear.

2. Earning money is a privilege, not a right. Nothing is free in life, and a respectful attitude about earning money is necessary. Not everyone has the ability to work, nor does everyone have a job. Be thankful when you’re given the opportunity to earn your own money.

3. Wasting money adversely affects you AND others. You can influence others in your family and your community by encouraging good or bad spending habits. Just like someone is always setting an example for you, you are always setting an example for others.

4. Saving up for a wanted item is not the same as saving long term. While delayed gratification is a necessary money skill, it’s separate from creating a savings plan.

5. Giving to others isn’t about charity; it’s about investing in the lives of those you’re inspired to help.

6. Giving financially to others does not make you superior to them. Someday, you may need to ask for financial help yourself.

7. Sometimes, circumstances dictate our financial situations (ie. recession, natural disasters, lottery winnings, death, job loss) and no amount of good or bad planning is responsible for the end result. Good money management builds character and increases your chances of doing well financially. Though it won’t guarantee a stable financial future, it will help you deal with life with grace and integrity.

8. Learn to be content with what you have, but never stop dreaming big.

9. Mistakes happen. You’ll lose money, but it’s part of the learning process.

10. Don’t be afraid to try new investment strategies.

11. Never stop learning about money management.

12. Spend time with people who manage their money well and listen to their beliefs about money.

13. Read books about managing money. Even if you don’t understand everything, you’ll pick up a few terms or ideas to help you grow your understanding of financial management.

14. Even pennies matter.

15. Self-reflection is an excellent teacher. Frequently take time to examine how you feel about money and the lessons you’re learning.

What’s your favorite? What would you add to the list?

Btw, there's a pretty nifty tool that motivates your kids to do chores. It's called MyJobChart.com. With a free account, they can earn points for finishing jobs you assign them, good towards free merchandise. Give it a try. It's completely free!

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{ 6 comments… read them below or add one }

Matt Bell January 17, 2013 at 9:14 am

Great list, Jamie. Your sixth idea really stood out. You don’t typically see that on these sorts of lists, but it’s a really great point. We’ve been helping our kids develop the generosity habit since they first started receiving money, but I honestly have never thought about the feeling of superiority that can come from always being the giver. Thanks for all the great ideas.

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Chris January 17, 2013 at 2:10 pm

Money Management should be taught in schools. Here in the UK so many kids go to University and rack up so much debt that there is a significant number of people who can’t cope and commit suicide. It’s a terrible shame, all because not enough kids understand the true value of money.

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Shane January 18, 2013 at 6:33 am

This is a great list and something that yes, every child needs to know, I think this should be reserved for those who are older than ten, maybe more like 14. Money management should be learned at an early age.

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Tadeu January 18, 2013 at 12:12 pm

Very good list, but not only for kids. I know a lot of “adults” that should read the list and put those skills and beliefs in practice day after day. Money is a very important part of life (not the most important) and can help us to be prepared for a lot of new opportunities and contribute to a well being and peace of mind. I will do my part and pass it to my kids as well as to my relatives.

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Marbella January 20, 2013 at 12:56 am

Long list of good advice, but really can a child learn all these things and understand? I think it takes many years to get them to understand this.

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Amir January 21, 2013 at 10:46 am

Very good list! Thinking back to my own childhood , two key lessons I have learned and try to teach my own kids are: the difference between true assets (which can grow over time) and liabilities, and learning both from successes and failures when managing your money.

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