7 Ways To Teach Your Kids Good Money Habits

I grew up in a household where only the adults talked about money. There was no mention of budgeting and little mention of saving. There were no financial plans in place that I knew of and it always seemed like we were struggling financially. That mindset of money followed me throughout my adult life, and the shift only came when I got divorced and was now a single mom.  Here are 7 ways to teach tour kids good money habits. 

Money Mindset Shift

Becoming a single mom I would say, became a blessing in disguise. I had to quickly learn how to get my finances together, not only for myself but for my kids. Now I had this awesome responsibility of rewriting history.

I now had the opportunity to teach my kids good money management. Teaching my kids about money all started with a game of Monopoly. Some of the lessons I could teach them on budgeting, saving, and investing?

I wanted to play a key role in shaping my children’s feelings, thinking and values about money, and here is how I did it. 

Start With the Basic

I started by teaching my kids to identify money because I wanted them to identify their value very early. Then I would suggest around six or seven years old. I started with coins and moved to bills because it was also important for them to learn the features and texture of real money.

I started using the cash envelopes system, so my kids would actually see me using the cash, especially, and whenever I used my debit card I would explain to them where this money came from and how it can be used. They understood that my cards weren’t magical cards that I waved and money appeared

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Create a Habit of Saving

Learning to save isn’t just an essential money habit. “Saving teaches discipline and delayed gratification,” Renick says. He also says “Saving teaches goal-setting and planning. Saving stresses being prepared. Saving builds security and independence.”

Help your kids get in the habit of saving by giving them a piggy bank or savings jar where they can deposit coins or cash.  Allowing your kids to save for short-term goals, such a toy is a great place to start. As they get older their goals get bigger and so does their savings.

Create an Allowance System

Allowance is a simple concept. You give your kids a specific amount of money a week, sometimes in exchange for doing some chores or tasks around the house. The money they earn is for them to budget (and ideally save), which should teach them the value of money.

In our household we have a chore-based allowance, every two weeks my kids earn an allowance for completing their tasks.

Now the question is, “how much should you give? A common rule is to give a $1 allowance for every year your kid has been alive. So, if you have a 7-year-old kid, then their allowance for the week is $7. Some parents think this amount of money is too much, it really depends on you as a parent and your budget.

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Teaching them How to Make Smart Money Decision

I would allow them to take $10 from their allowance with them to purchase something within that budget when we go to the store. I would explain to them that $19 was their budget including taxes. The taxes part would always annoy them, they never understood why they had to pay taxes as a kid.

This taught my kids that spending isn’t always about buying things you want. I wanted them to learn that they will have to spend money on things they need when they’re older.

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Encourage Older Kids to Earn Extra Money

Middle school-age kids may not be eligible to get a traditional job, but that doesn’t mean they don’t have opportunities to earn extra money. Here are some ways kids can earn a little extra: Collecting recyclables and taking them to the recycling plant, snow shoveling in winter for neighbors, tutoring students who are struggling with academic subjects, and pet sitting and dog walking.

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Teach Children the Importance of Giving

While earning, saving and spending are important, so is helping out those less fortunate. Explain to your kids why you give money to charity and encourage them to give some of their allowance or other earnings to the less fortunate. Learn about what your child feels strongly about and show them ways to help.

Teach Kids How to Invest

If you want your kids to learn good money habits, teach them about investing, I opened custodial investment accounts for my kids, so they could see how investing works and how money can grow at a faster rate. They may not understand it all together, but every now and then I go through it with them, even when the economy is bad.


If you want your children to develop good money habits, they need to see you making smart moves.  Educating your children about personal finance is a process that can take time. But if you put in the effort and continuously communicate a clear message about money, you will instill good habits that will serve your children well.