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Teach Your Children About Money

By: Steve Johnson

2/12/2008 - 62 Comments

If you don’t, nobody else will.  For some reason, parents today believe that someone at school is teaching kids about money, but they are not.

Very few people teach their children even the very basic ideas of money management. The few that do are the wealthy, which explains why they are wealthy.  A good strategy is to start with simple ideas when children are young and continue to add more concepts as they grow. For example, when your children are five-six years old, open a savings account and put twenty dollars in it.  Ask grandparents to add a little each birthday and show your child the bank statement with their name on it describing how much money they have.  You can also start a small allowance and get them a piggy bank for their room. 

At eight-to-ten, you can explain how the bank is paying them interest on their money and show them the interest on their bank statement.  Don’t try to teach your child everything about money at this age – they primarily need to focus on reading and writing.  Playing Monopoly is also a good way to get kids thinking about money.

Ten and Over

At ten-to-twelve, you can tell them about investments, explaining how investments like bank CD’s will pay a higher interest rate on their money.  You can even invest some of their money (added with some of yours) into a CD – so that your child can learn from this experience about investments. 

At twelve-to-fourteen, you can teach them about the monthly household bills.  A good way to do this is to assign them to manage the bills for one week, by collecting them from the mail and writing out the checks (you will have to sign) when they are due.  This is also a good time to show them your budget – explaining how you manage the family money supply. 

Finally, at eighteen, open a checking account for your child and teach them how to create their own budget – which they will use as the foundation for their own family budget.  College is always a financial challenge as students are living off many sources of income including; scholarships, summer jobs, student loans and parents.  Therefore, you may want to help them with their budget.  Sometimes it’s easier to setup semester budgets instead of monthly or yearly budgets.

This is also a very easy time to get very far into debt with all the easy credit cards that are thrown at college students.  However, by now your child will have been well prepared and informed of the dangers of debt and the rewards of investments.


The divorce rate in the US is 50% and I would rather avoid my child going through one of those.  It turns out that most people claim that ‘money’ was the number one problem. Therefore, you may not know it, but you are not only saving your children money – you are probably saving their marriage and giving them a much happier life – which off course means a happier life for yourself. :)

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