8 Bad Things You’re Teaching Your Kids About Money

by David@MoneyNing.com · 17 comments

This is a guest post from Jonathan, one of the writers at Master Your Card.  The blog is all about teaching people how to be fiscally responsible, with the focus on helping readers to get out (and stay out) of credit card debt.

If you’re a parent then you probably know that your kids are always watching you and remembering the things you do. You may tell your kids that swear words are bad and you should never use them, but the one time you drop something on your toe and let out a hearty stream of cussing your kids think this gives them carte blanche to indulge in an occasional swear word.

In other words, the things you do have a huge influence on your kids whether you like it or not.

This is especially true when it comes to dealing with money. As a parent, you need to realize that you’re setting the stage for how your kids will eventually deal with money as adults. Remember: they watch everything you do, and they figure that’s the way it is supposed to be done.

Are you teaching any of these bad things about money to your kids?

  1. Things just land in your hands. You’re walking through the store and your kid sees a candy bar she wants, so you grab it and give it to her. She then sees a coloring book she wants, and that lands in her hands too. At what point are you going to start explaining to your kids that everything in a store costs money?
  2. Electricity is free. Even preschoolers can start to grasp the concept that all the resources they use cost something. Once they understand this they might actually start turning the lights off when they leave a room.
  3. Saving isn’t a priority. Every kid should have a piggy bank and a savings account along with a parent who is willing to take the time to teach the basic principal of saving money. You should also make it a point to save money each month, and to discuss your saving methods with your kids.
  4. The ATM is magic. The next time you stop at the ATM to get some cash, narrate the process to your kids. Otherwise you might inadvertently send the message to your kids that any time you need money, all you have to do is ask the ATM really nicely and voila.
  5. Everyone has enough money. If your kids don’t ever witness you donating your time or money to people in need then they may not realize that there are people in the world who need help. Kids should learn that money can be a means to help other people and not just a way to buy a lollipop.
  6. Delayed gratification? What’s that? Do you decide on impulse that you want something expensive (a new car, a new TV, or whatever) and then just go out and buy it on credit? You’re teaching your kids something dangerous: You don’t have to budget and save for the things you want. You can just get them and pay later.
  7. Cash isn’t very useful. Do your kids ever see you using cash? If all they ever witness is you using your credit or debit card then they’ll have a hard time understanding what cash is all about. Make an effort to use cash once in a while and help your kids understand the basics of actual cash.
  8. A job is just something we do. Do your kids actually understand why you head off to work every morning? Unless you tell them, they may not make the connection between working and income. Teach them about working to earn money.

Take a look at how you handle your own finances and then realize that this is probably how your kids will handle their finances unless you make an effort to teach them otherwise. If the thought of your kids eventually handling their money as you do now makes you shudder, it’s time for a change.

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{ read the comments below or add one }

  • anne says:

    Money lessons can be taught easily. Pay allowance, require kids to save to buy big purchases or make repayment plans to pay their parents back (w/ interest). All money lessons better learned early than late.

  • Dan says:

    No way. I never understood why “pay for grades” is so hated. This is basically how the rest of your life works, why not learn the lesson early?
    Do you have a job? If you work harder than the next guy or girl, and show better results, you will get a promotion or a raise. You work harder and you earn more money. Teach your kids the same thing!!
    Did I always love going to school and learning? No. Did I kick ass at it? Yes. Guess what? Now I have a good job that pays me a nice amount of money. Going to school is your kids’ job. Show them that being good at their job pays dividends! Pay them for grades.

  • KathyRo says:

    One day I picked up my 3 year old nephew from day care and he asked me to take him to McDonald’s. I didn’t have any cash on me and I didn’t want to swing by an ATM either but to keep it simple I just told him, “No, I’m sorry, I don’t have any money.” This prompted the following exchange:

    Nephew: Did you go to work today?
    Me (puzzled): No, that’s why I’m picking you up.
    Nephew ( with a stern gaze ) : First you go to work, then you get money!

    I couldn’t help it — I just laughed and laughed.

  • Terri says:

    Very good article. Just found it when looking around and thought
    she did well. I have two boys-7 and 10 years. We are trying to teach
    them about earning nonessentials sometimes and doing chores to help
    out in the family-not just because they are going to be getting allowances.
    It’s funny, my 7 year old is already asking for extra chores so that
    he can save up money-he already has almost 40 dollars saved.
    Unfortunately, my 10 year old gets a dollar and just has to spend
    it on something. Obviously personality affects how well they child
    is going to control the money they earn.

  • Deb says:

    One of the worst things parents can do is pay their children for grades they get on school report cards. Children’s roles are to go to school, and part of that is to do the best they can. If parents pay their students for grades, the message becomes,”do well only if you get cash.”

    This goes for jobs that are part of being a family member also. Making their beds, doing the dishes, recycling, and taking out the trash are, quite simply, examples of the distribution of labor that must be done to make the family environment run smoothly. Getting good grades is part of school life, doing tasks at home is part of family life. Payment for these things send the message that kids should only do these things if they get money for them.

    Getting paid for everything is not real life. It can erode such values of responsibility, obligation, community generosity, and human kindness because they are the right things to do.

  • Megan says:

    This is a good article, but I’d like to add something to the last point:

    Although I agree that your child should understand why you’re going to work, they should NOT be taught to solely rely on their job for money.

    Parents and children together should sit down and read the book “Rich Dad, Poor Dad,” which helps the reader learn that once he/she has learned how to invest in assets (not liabilities) that continue to provide a recurrent income to him/her, then the paycheck he/she brings home from said “job” is just an “extra” – – – and they actually get to do what they enjoy. This way, if they get fired or laid off, it’s not a life-altering crisis.

    The poor and middle class know how to work for money.

    The rich know how to make money work for them.

  • Michael says:

    The credit is a dangerous place. The first thing kids need to realize is that money don’t grow on trees and there is a limit to it… Hard to teach these things though, don’t you think?.

  • Danielle says:

    So true…. Especially the first point – whatever the kid wants, he usually gets if not by asking once, then by crying like a maniac 🙂

  • Track Your Spending says:

    I don’t know about everyone else, but my preschooler is very quick to call me out on hypocrisy. Keeps me accountable. So now I’m getting chided by a 3-year-old for leaving the room without turning off the lights.

    Paulette Fellwock

  • CreditMom says:

    Just yesterday I realized I wasn’t sure if my kids understood the difference between credit and debit cards. Since I pay with debit only I was afraid they thought I was charging everything. So I sat them down and explained that credit is a loan that you pay back with interest. So take a Wii game at $50 and put it on loan and pay it out a little each month and it may end up costing you $75…not worth it right?

    But, the only way you can use debit is if you have the money in the bank. If there’s no money you can’t buy it because the store will decline your card.


  • Dominique says:

    I echo your thoughts about the importance of teaching kids the value of money and that it should be earned not dished out on a silver platter. I too have been trying to teach my toddlers that they have to “work” before they will receive their rewards.

  • Elisheva Wiriaatmadja says:

    One of the most effective way to teach them about money is to let them have their own little pocket money and teach them to save to buy their own stuff so they may learn how to manage their finances at a very early age. This way the know that things aren’t cheap.

  • Lorenzo says:

    Try getting your kid an ATM card. Have kids look at a bank statement, make deposits, save, earn, make withdrawals, and master the standard financial access tools of the current time. They will use money in some form, so teach them the basics, and even have them get a j-o-b.

  • Play Games Win Prizes says:

    Great guest post. A lot of parents are teaching their kids the wrong things and it’s just horrible when my wife and I walk by families that just cuss to each other…:(


  • Arman Rousta says:


    This is a good blog post and a GREAT topic. Essentially, what you are saying, which I agree with, is that, in order to teach your kids, YOU as the Parent have to mature in the way you handle money. Teaching yourself good habits is the best way to influence your kids.

  • Rick Vaughn says:

    Good post.

    I think delayed gratification is probably the the main theme here. Everyone wants to spoil there kids but they don’t realize the long-term damage and sub-conscious thoughts they are relating. If you were to follow these those are a great start.

  • frugalscholar says:

    This is so true. It reminds me of parents who pressure their kids to read while the parents watch tv.

    I will be posting on frugality and teens. See my first post on frugal holiday gifts and teens: frugalscholar.blogspot.com

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