“Don’t Eat Your Allowance” and Other Lessons in Raising Money-Smart Kids
Let’s face it: kids are great at asking for things and not so great at understanding how money works. (If you’ve ever had to explain that your debit card is not a magical plastic wish-granter, you know what I mean.)
But teaching kids about money doesn’t have to be awkward or complicated. In fact, it can be fun. Think of it as raising a future financially responsible adult who won’t blow their savings on collectible sneakers and energy drinks.
Here are some easy, real-life ways to teach your kids about money—without needing a whiteboard, a lecture, or a mini IRS audit in your living room.
1. Money Talks… and So Should You
Start early. Toddlers won’t understand compound interest, but they do understand, “If you eat that dollar bill, it cannot buy you a popsicle.” As they get older, have simple conversations about how money works: what things cost, how we earn, save, spend, and donate. Bonus: it may stop them from trying to buy a jet ski with Monopoly money.
2. Give Them an Allowance—With Strings Attached
An allowance isn’t just free money—it’s their first budget. Help them split it into three buckets:
Spend (for that glittery slime they need immediately)
Save (for that big Lego set that costs more than your first car)
Share (to help others, build empathy, and maybe offset their slime addiction)
It’s like budgeting training wheels—with less risk of crashing into debt.
3. Make It Real, Not Theoretical
Take them shopping and let them make choices. "You have $5—do you want gum, stickers, or save up for that new video game that somehow costs more than your monthly streaming service?" Let them make small mistakes. Buying something they immediately regret? That’s not a failure—it’s an early lesson in budgeting wrapped with a side of buyer’s remorse.
4. Earning Money > Magic Money
Teach them that money doesn’t come from ATMs or the Tooth Fairy’s private equity fund. If they want extras, help them earn it—chores, lemonade stands, dog walking, even “professional sibling wrangling.” Learning to connect effort with reward is one of the most powerful money lessons of all (and it might just get the dishwasher unloaded).
5. Be the Money Role Model You Wish You Had
Your kids are watching you—especially when you whisper “we really shouldn’t buy this” as you add it to the cart anyway. Show them what it looks like to budget, save, and plan. And if you make a money mistake? Own it. Teaching kids that even adults are still learning is one of the most empowering lessons of all.
The Bottom Line
Money doesn’t have to be taboo, mysterious, or boring. Start small, keep it simple, and turn everyday moments into opportunities to raise confident, thoughtful, financially savvy humans.
Need help thinking through how to pass down financial wisdom without sounding like a 401(k) brochure? That’s what we’re here for. Reach out—we promise no lectures (and only light teasing if you still don’t know what a Roth IRA is).
