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What I Am Teaching My Kids About Money

What I Am Teaching My Kids About Money

August 11, 2022

Children have the innate ability early on to communicate with us by simply pointing to an item and saying, “I want.” However, understanding how much that item costs (or where the money comes from to pay for it) is something that must be taught. 

It’s never too early to start teaching our children about money. In fact, most children form their money habits as young as age 7. (1) I have been talking to my children about money since early elementary school. We have conversations often regarding certain items they want, but we also talk about perceptions, such as how some people appear to have money and others don’t, and why many times those perceptions are wrong.

Here are 5 money-related topics I am teaching my kids about that can work at any age.

No Allowance

Not giving my children an allowance may cause you to scratch your head, but think about it this way. Do you get paid to take the garbage out or clean the bathrooms? Taking care of a home you live in is not usually a paid gig, so I don’t believe they should be paid to do the same chores we do as adults. I’m also not a fan of paying someone based on how much time they spent doing something. I believe the result, or productivity, is more important than the time spent. With that, my children are paid per job for work they do, but only for special projects at home or elsewhere. Plus, when kids are older and working a part-time job, they are less motivated to do chores for money since they are making money elsewhere. Teaching them to earn money through work outside of regular chores can be an effective tactic to help them be better prepared for adulthood.

Save Half, Spend Half

When your children receive unexpected funds, a great tool to teach them is to save half and spend half. Money for birthdays, holidays, good report cards, whatever the source may be, is usually unexpected—and therefore tempting to spend it all on something fun. Teaching your children to save half of all gifts or unexpected monies could help teach them about delayed gratification, and may even help them develop better savings habits as adults. (2)

Visual Savings

Most people are visual learners. It’s no different with children. When you are first teaching them about money and saving, use a clear jar so they can watch the jar fill. Then, as they age, make a trip to the bank and open a savings account. Have them go in with you to make regular deposits and show them how their money grows each month. Once they reach their teens, work a part-time job, and want to spend a little more money, reinforce the “save half, spend half” rule and make sure they’re putting half of their paycheck into savings.

Visual Spending

Just as children will be excited to watch their money grow, they will also be eager to spend! Take this opportunity early on to show them how much, or how little, their money will actually buy. Have them take out $5 or $10 from their money jar, go to the store, and pick out a toy; let them physically hand the money to the cashier. This lesson should teach them early on the value of a dollar. 

As they get older, you can teach them opportunity cost, which is a fancy way of saying, “If you spend your $50 on that video game, you won’t be able to buy that outfit you wanted.” The older your children get, the more they need to understand how to make decisions with money, and the consequences of those decisions.

Developing Long-Term Habits

I want my kids to grasp that money is earned, not given. I want them to understand the importance of living within their means and being a good steward of their money. I want them to find a balance between now and the future. Although tomorrow is not guaranteed, most of us will see it, and thus we should also be saving and planning ahead for all that the future might hold. 

At Center for Wealth Management, we want to remind clients that while planning for tomorrow, we should not forget about living for today. If you could benefit from a trusted financial partner, reach out to schedule a free introductory meeting online, call (248) 220-4321, or email me at

About Justin

Justin Williamson is a senior partner and co-owner of Center for Wealth Management, an independent, fee-based wealth management company in Troy, Michigan. Justin has been serving clients in the financial services industry since 2001. He spends his days helping his clients achieve their financial goals and make the best decisions for their families so they can spend time on what they love and experience financial peace of mind. Justin is known for his dedication, integrity, personal touch, and ability to simplify complex issues. Justin specializes in serving engineers and other professionals who are close to retirement or recently retired and helping them maximize their benefits and create a retirement plan they can rely on. He is a seasoned public speaker and presents at numerous corporate events each year on retirement planning, Medicare, Social Security, and other financial topics. Justin has a bachelor’s degree in Business Administration majoring in Personal Financial Planning from Central Michigan University and is a CERTIFIED FINANCIAL PLANNER™ practitioner. 

Outside of work, Justin enjoys spending time with his family. He lost his wife of 18 years, Heather, to brain cancer in 2020. He and his son, Carter, and twin daughters, Jaden and Kelsey, work to honor her and make her proud each day. Outside of work, you can usually find him coaching baseball, softball, and basketball, and spending time at their family cabin at Higgins Lake. Learn more about Justin by connecting with him on LinkedIn.