Teach the Children Well: 3 Simple Ways to Show Kids the Importance of Money


No one is born with the innate ability to manage money. You didn’t enter this world with a firm grasp on income versus expenditures, the importance of saving for retirement or the ins and outs of investing in the stock market. These are things you had to learn along the way.

And kids are just like you, only smaller.

They have to be taught. They need to be guided. It is imperative that the grown-ups of this world (I’m looking at you) model good financial behavior and then reinforce those lessons every day.

The Problem

Money is a very loaded topic for most people. Either you have it, and feel anxious about keeping it, or you don’t, and feel anxious about making more. In some families, these are forbidden topics.


And you can’t expect for this gap to be made up in high school.

According to the Council for Economic Education “Survey of the States”:

  • Only 17 states require that high school students take a course in personal finance
  • Fewer than 20 states require that students take economics
  • Fewer than 20% of high school teachers feel competent to teach personal finance

Given this lack of education, it’s not surprising that 4 out of 10 millennials are overwhelmed by debt, greater than half of this generation of young adults lives paycheck to paycheck, unable to save for the future, and over a quarter of adults surveyed by the Council for Economic Education admitted that they don’t pay their bills on time.


We are Responsible for the Change

Our kids deserve more than this. And it’s up to us to teach them.

Here are 3 simple Ways to Show Kids the Importance of Money:

  1. Write your kids (or any kids that are in your life) a letter.

One thing that a whole lot of kids have in common is their inability to care about money. This is normal. You start to talk about financial planning with a teenager, and you only have a handful of seconds before their eyes gloss over and they’re looking for an escape route.

They don’t care, and probably won’t care until they go to buy something later in life and realize that their checking account has been overdrawn.

So write them a letter. There are a lot of templates and ideas for how to construct such a letter, thanks to the growing popularity of this strategy and this article in the New York Times. But the overall idea is simple.

  • Tell them your money story. Be honest, and include mistakes and successes that you experienced along the way.
  • Provide a few resources that have helped you with your personal financial journey.
  • Make it personal. Tell them WHY you want them to learn about money. Why it’s important to you, and what it has meant in your life.

Sometimes, a letter can communicate things more successfully than a conversation. And they’ll have it forever to share with the kids in their lives.

  1. Teach them about opportunity cost.

This one is pretty straight forward, and can be implemented anytime they want you to buy them something.

An opportunity cost is defined as the “cost of an alternative that must be forgone in order to pursue a certain action.”

Put simply, if you buy this now, you won’t be able to buy something else that you might want more, later.

  1. Don’t hide it from them.

There are so many little lessons about money hiding in your everyday life. Every time you go to the grocery store, or buy new clothes for school, show them that you’re paying for these things with money, that you earned. Money that will now go away, unavailable to buy other things.

Explain that when you go out to dinner, it’s more expensive than eating food at home. Tell them about earning money at work, saving money to use for vacations and how you can only spend as much money as you make.

Teach them. Show them how you do it, even if you’re not doing it perfectly.

Take the mystery out of money, and set up the next generation for financial success.