How to Raise Financially Savvy Children

Money was never talked about much in my household growing up and when it was, it was usually from a place of lack or scarcity. What you learn and experience as a child can stick with you throughout your adult life – especially when it comes to personal finance. We’ve put together a list on how to raise financially savvy children.

Like most people, I made so many financial mistakes when I got older whether it was blowing all the income from my first paying job, not knowing how to use a bank account properly, or rushing into debt.

Once I started learning more about how to improve my finances, I wanted my son to develop a solid financial foundation as well. More importantly, I want him to have an abundant money mindset and grow up to be financially stable. If you want to raise financially savvy children as well, here are a few things you can do.

Don’t Shy Away From Money Conversations

Kids will generally let you know when they’re ready to talk about money. My son started conversations with me early on when he asked how much a toy costs or how much money I have. Instead of changing the subject, I decided to respond to his questions the best way I could and let him know that it was okay to talk about money.

When we’d go grocery shopping, sometimes I tell him how much I plan to spend and explain why we can and can’t get certain things. Sometimes, we get extra splurges while other times, we stick to the budget more strictly.

This lets my son see a realistic example of balancing wants and needs.

Open a Child Saving’s Account

My first banking experience was a horrible one. I opened up a checking account with a friend at 17 and deposited a check. I never did anything else with the account and thought it closed on its own. Months later, I checked my credit and saw that the bank had reported me to collections since the check bounced and my account was negative for so long.

My credit score was ruined before I even had a chance to build it so unlike many other 18-year-olds, I wasn’t getting any offers in the mail.

I wanted things to be different with my son so I took it upon myself to help him open a Junior Savings Account at a local credit union when he was 6 or 7. Some people may think this is too young, but around that time he was already asking about money and we had open conversations all the time.

I liked the bank account option we chose for him because it was geared toward kids. They gave him free trinkets like a piggy bank and a bag when he opened the account. Whenever he deposits $20 or more, the credit union gives him a coupon to the local ice cream shop.

They also have several events for kids throughout the year. By opening up a Junior Savings Account, I can help my son build positive experiences around banking and understand how to save money.

If you want to raise financially savvy children, here are a few things you can do. Click To Tweet

Allow Your Children to Practice Earning Money

Some parents don’t believe in giving their children an allowance, but I’m all for it. If a child never has the opportunity to earn their own money, they won’t know what to do with it when they do start working.

I landed my first job at 17 years old which was an internship paying $15 per hour. It was a great job but like a typical teenager, I blew my checks on absolutely nothing. While it’s only natural to make financial mistakes when you’re young, imagine if I had saved some of my income or opened an Individual Retirement Account.

I could have had a higher net worth today which is why it’s important that I raise financially savvy children. My husband and I pay our son a small allowance each month only when he does the chores he’s assigned. The allowance isn’t guaranteed each month and it must be earned.

When we do pay allowance, I encourage my son to split the money up into 3 categories: save, spend, and give. That way, he can balance priorities. I don’t expect my son to get a job any time soon, but we’re open to opportunities for him to earn money by doing small jobs around the house or with family.

RELATED: How Much of an Allowance Should Your Child Receive?

Let Your Child Make Spending Decisions

As your child gets older, consider involving them in certain spending decisions. It’s important for them to make money mistakes early on so as they get older their financial management skills improve. My son gets money for his report card and can choose to spend it however he wishes. If he blows the money on something that he regrets later, he learns a lesson for the future.

You can also allow your kids to help budget for snacks at the grocery store or plan their own birthday party with a budget that you set.

Make Learning About Money Fun

Learning about money doesn’t have to be boring. Don’t condition your kids to think that saving, budgeting and managing money is boring or a hassle. Give them positive experiences with money and read personal finance books for kids together.

Some of my favorite personal finance books for kids include:

You can also consider playing games like:


Most parents just want the best for their children. By being able to raise financially savvy children, you can set them up for success and more opportunities. Use these tips as a starting point but feel free to develop your own strategies and tactics to teach your kids about money.