How To Teach Your Children Financial Responsibility and Management

How To Teach Your Children Financial Responsibility and Management

Once your child begins to ask for things at the store, or things they see on television, it’s time to start teaching them about money. They need to understand first and foremost that money needs to be earned, and there is no entitlement in life. Forming good money habits in children is the best way to ensure they will become financially responsible adults, and there are many ways to begin to instilling the value of a dollar in your children.

Don’t Just Give Them What They Want

If a child knows that they can whine and cry to get what they want, it will be very difficult for them to understand otherwise. They then see toys and material items as things they are entitled to, that they deserve to have just because they want them, and this is destructive to their sense of the value of money. Show them that they need to earn the things they want, that they don’t just get them by complaining they don’t have it.

Give Them An Allowance, and Have Them Spend Their Own Money

It’s much easier to spend other people’s money, as it doesn’t feel like a loss. If a child has a weekly allowance that they earn by doing chores around the house, helping out their brothers and sisters, or from showing other acts of advancing responsibility, then they have their own money to spend and save. Don’t use their grades as a means to give them more or less money, as sometimes all the time and effort in the world won’t get them an A, but base it on their hard work and dedication.

Invest In a Modern Piggybank

Piggybanks that hide their contents from children are a little dated. Nowadays, there are many options from online piggybanks, to see-through piggybanks that separate the money into different categories, such as saving, spending, donating and investing. This way, not only can the child see how much money they’ve accrued, they learn that money is not just collected to buy things, but is used for many different things, like sharing and security.

Make Them Create a Budget

This is something that can be developed over time. Each week or month, guide them in counting their money and deciding how much is going to be used for toys, candy, saving, and gifts. As they get older, things like clothing, Starbucks, and going to the movies can be thrown into the mix. They constantly learn how to properly portion their expenditures, and won’t feel overwhelmed by the money they can and cannot spend.

Be An Example

Children learn best by example. If children see their parents constantly putting luxury items on credit cards and neglecting essentials, they will begin to think that’s an acceptable way to treat finances. Having your own budget and sticking to it, living inside your means, and always maintaining a good balance between spending and saving will show them the proper way to take care of money, and will apply that to their lives.

Author Bio

Melisa Cammack is the mother of three children, and a business owner, so finding the right way to educate her children on money came pretty naturally.
Melisa is currently writing on behalf of Credit Card Column, for those looking for more information on credit cards, and what credit card best suits their needs.



  1. All great tips. And even when they have the money, remember YOU are the parent. You can still veto!

  2. I wanted to do this last year, but never implemented it. Plus all the criticism :You shouldn’t be paying for this” – GRRRR. I really want to do it

  3. Great advice. My husband did not grow up with an allowance so he frowns upon giving it to our kids. I want to push him a bit more on this topic since I think it really does help them learn about money management. Stopping by from Still Blonde on FB.

  4. Jenna M Wood says:

    I had an allowance growing up, and it taught me a lot of financial responsibility. My mother also used to to keep me away from too much junk food. If I wanted it I’d have to earn the money and buy it!

  5. What great tips. It is important to teach our kids about using our money wisely!

  6. Paula Robinson says:

    Great tips. It is such a good idea to start early!

  7. It’s so important for the kids to learn these lessons early. I had to break my kids perceptions that credit cards meant free money. Sad commentary on today’s youth.

  8. I love your idea of giving children a way to visually see what categories their money is in !!!! SO IMPORTANT for little ones to get the concept! Great post.

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