7 Ways to Teach Kids Money Management and Financial Responsibility

Teaching your kids about money is so important. As a parent, it’s one of our biggest jobs to adequately prepare our kids for their adult lives, and managing money is a huge requirement of adulthood. But it can be hard to figure out what to do or where to start.

I’m certainly no personal finance expert, but I’m working more and more on self-education. I’m determined to give my kids a strong base of knowledge in managing their money and making responsible financial decisions. Below are some ideas for where to start, including some crowdsourced ideas from family, friends, and fellow Iowa City Moms Blog teammates.

1. Teach them early about saving up for items they really want.

When I was a kid, we got an allowance for doing chores around the house and we divided it between savings, spending, and charity. There are a lot of options for how to provide an allowance and set up chores, but what I think is key is coaching them through saving their own money up for a toy they really want. When you’re out shopping together, resist saying yes to their requests for impulse toy purchases, and talk about what it will take to save up for the item themselves.  

Additionally, one of my fellow ICMB teammates discussed opening up a Hills Bank Penny Savers account with her five-year-old. The bank has the child come in and sign the paperwork themselves (along with their parents, of course). A minimum balance isn’t required on the account, and the child receives a regular newsletter and birthday cards from Penny Bear. Once they are 12 the account convers into a GO! Savings account for kids 12-17, and once they are 18 the account converts to a Free Savings account.

2. Focus on minimalism, frugality, and giving back.

Other tenants to an adult life of financial responsibility include lessons on being more minimal and intentional about your material consumption. Besides lessons about money, work in other practices such as the Four Gift Rule, take them out shopping for items to donate, or bring them along to volunteer activities.

3. Incorporate finances into their daily lives.

Take them out and about on errands to shop for household goods or go to the bank. Use it as an opportunity to talk about the financial aspect of it and why it’s important. For example, at the grocery store you can talk about household budgeting, and at the bank you can explain the difference between your checking and savings accounts.

4. Incorporate age-appropriate money games for younger kids.

The internet has a ton of ideas for activities about identifying, counting, sorting, saving, and spending money. Some ideas can be found here and here

5. Make sure they get a real education on finances.

Junior Achievement of Eastern Iowa provides K-12 education on financial literacy. I don’t have any kids in school yet, but fellow ICMB teammates discuss how the class prompts their children to engage in conversation at home about budgeting, earning money, and needs versus wants. I never was offered any type of program like this when I was in school and desperately wish it was part of my curriculum! On Junior Achievement days, try to start dinnertime conversations about what new topics they learned that day.

Additionally, you can work on teaching these lessons at home. Some concepts that teenagers should be aware of likely include, “How does a credit card work and how is the interest calculated?” “What is compound interest?” “What are some different types of options for investing and saving money? “What’s a credit score and what affects my rating?” and much more. If you need to brush up on your skills, some books that colleagues and I have found to be informative include the following:

Get a Financial Life

Why Didn’t They Teach Me This in School?

The Total Money Makeover

Dave Ramsey’s Complete Guide to Money

All Your Worth: The Ultimate Lifetime Money Plan

The Automatic Millionaire  

6. Coach your teenager through their first paychecks.

Once your high schooler has a job, coach them through opening their first bank account and depositing paychecks. Continue to coach them through saving money for items they really want, but with much more autonomy than they were given with their childhood allowance.

7. Be open and understanding.

Be open to having honest conversations about money, pick your battles, and understand that they may not accept what you are teaching at the time. Cultivate an open atmosphere at home where you talk about money and let your kids feel comfortable asking you questions about household finances. Talk about where money comes from, the effort it takes to earn it, and that sometimes you have to say no to things you can’t afford.

No matter how strong of a financial education you give your kids, a lot of lessons will be hard to teach once they are in school and surrounded by a group of their peers all day. You may be teaching valuable lessons about working hard for your money and only buying things you can afford, but if they are surrounded by kids that aren’t being taught the same lessons on responsibility and materialism, it may be hard for them to agree with your point. You may be teaching a lesson on only taking trips you can afford, but your child might not be willing to take in that teaching if their best friend is in Disney World and they’ve never been.

What are your ideas for teaching kids about financial responsibility? Share anything that has worked for you in the comments section below!


Brigette lives in North Liberty with her husband Brian, energetic daughter Kate (October 2014) and their two cats, Penny and Olive. Originally from the Chicago suburbs, Brigette came to Iowa City to attend the journalism school at the University of Iowa, fell in love with the area, and decided she couldn’t leave. After meeting Brian while working at the same Iowa City restaurant in college, they got married in August 2015 in the heart of downtown. She works full time in project management and as an employee of the Core Fitness Kids Club while finishing her MBA at Upper Iowa University. In her free time, she drags Kate out garage sale-ing, tries to keep up with her reading list and runs, lives for Hawkeye football season, enjoys a good meal on a patio, runs her Bachelor/Bachelorette bracket with her family and friends, and of course, chases her daughter around the pool and the park.


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