Start Teaching Kids Money Management

Last week I discussed “Who is Teaching Our Kids to Manage Money?”  So when do we start teaching money management?

Do you manage money the way you want your kids to handle their finances?

Is your household in agreement of with what money the kids can “have” and how to spend it?

Communication is critical

Let’s start with an exercise.  Get a pen and a sheet of paper. With your eyes closed, draw your dream island with a palm tree and coconuts.   Include a ship in the ocean that takes you to the island with a captain navigating the ship and entertainment on the island performing a hula dance.  As you draw your island, include fish in the ocean and birds in the sky under the warmth of a sun-filled day.  Remember, to draw this image with your eyes closed.  Remember the ship’s captain needs to see where he is going, so include port holes in your ship for navigation.  Okay, you have your dream island drawn – and artistic abilities aren’t scored in this exercise.  Open your eyes.

Is your drawing a clear image of the pictorial island you had envisioned?  And are the dreams and desires of how you want your children to manage money just as clear?  Parts of the picture are okay, but perhaps your captain didn’t make it on the ship.Paradise Island

As parents, we have great intentions, but are lousy at clearly defining the parameters.  Additionally, we are inconsistent at implementing the plan and agreed upon consequences.  (Think about re-drawing your island, would it look the same?) It is crucial for the learning to be effective and empowering that our children know the plan, but more importantly – we know and understand why we are implementing the system to teach our kids to manage money.  Do we want them to leave home with more insight and knowledge than we had when we were forced to learn the money management skills?

Start now

There is no need to delay this process until you have your finances in order, but start with spending you incur every month or week.  Begin with an amount your child comprehends and impacts the quality of their life, like a cell phone, video games or other spending elements.  The sooner you start teaching kids money management, the sounder foundation you are developing in them as they mature into young adults.

If your child has reached the age of maturity to gain a new responsibility or privilege, like a cell phone, this is a prime opportunity to link money management with the additional responsibility.  This teaches the kids the additional consequences of obtaining the new item and added obligations that are incurred. Think about the added commitments your child will accept responsibility for performing.  Without the additional responsibilities added to our kids, they quickly feel they are entitled to their possessions and don’t realize the impacts of having something as simple as a cell phone.


In the household, it is important to ensure all the adults are on the same page and teaching the same lesson.  Without this collective unity, money management will be a wasted effort and the kids will quickly learn the art of scheming and manipulation.

Start small, but start giving your kids the opportunity for you that you have confidence in them and trust them with small elements of money management.

Free sample contract

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Contact us

If you are ready to start demystifying your finances or need help to align your values with your children’s priorities, please contact to schedule a time to discuss how we can get started.


  • Carrie

    Reply Reply 08/04/2014

    I really loved the exercise at the beginning of this post and agree that we need to teach our kids to have a good relationship with money. We never talked about it in my family and I am making sure to do things differently with my son (he’s 3). Thank you again for the post!
    Carrie recently posted…[Day 4] My Unique AwesomenessMy Profile

    • Renae

      Reply Reply 08/04/2014

      Carrie –
      Thank you!

      I’m so happy to hear that you are teaching your 3 year-old money lessons. If you start now, he will learn to accept money as always being a component of his life.

      Keep up the valuable teachings.

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