Hey, Fellow Dads,
Money talks. But are we having that conversation with our kids?
Family finances have changed drastically over the years. Way back, people bartered—trading goods and services without ever touching cash. It was a simple system where financial planning meant making sure you had enough to last the season. Fast forward to the Industrial Revolution, and things got more complicated. People started earning wages, budgeting became a necessity, and the concept of “managing money” was born.
Then came the 20th century, where credit cards, mortgages, and financial products made it easier to buy things—but also easier to fall into debt. If you weren’t careful, you could get in way over your head. Now, in the 21st century, digital banking, crypto, and financial apps make managing money more accessible than ever—but also more confusing.
And that’s exactly why we need to teach our kids about money early.
What If You Had Learned About Money Sooner?
As dads, we want to set our kids up for success. But let’s be real—most of us learned about money the hard way. No one sat us down to explain budgeting, debt, or compound interest. Instead, we picked up money habits from our parents, older relatives, or just trial and error. For some of us, it meant living paycheck to paycheck. For others, it meant racking up credit card debt without understanding the long-term consequences.
I get it. I grew up hearing phrases like “robbing Peter to pay Paul.” My family didn’t have sit-down discussions about money, and as a young adult, I handled finances the same way my parents did—pay the bills, juggle due dates, and stretch the credit card when needed. It wasn’t until my wife and I started thinking about buying a house that I realized we were one unexpected expense away from disaster.
That was my wake-up call. We dug into books like The Total Money Makeover by Dave Ramsey and The Psychology of Money by Morgan Housel. We started budgeting, and got serious about managing our finances. And let me tell you—finally getting control over money was life-changing. Money isn’t just something to spend. It’s a tool. Used wisely, it provides freedom and security. Used recklessly, it keeps you trapped in a cycle of stress.
Teaching Our Kids What We Wish We Knew
Now that I have three kids in college, the importance of teaching them about money is even more real. They’re stepping into adulthood, and I want them to be financially prepared.
So, how do we teach our kids about money? How do we make sure they don’t repeat our mistakes?
The good news is, financial education doesn’t have to be complicated. The key is to start early and make money conversations a normal part of life. Here’s how:
1. Start Small and Keep It Simple
For younger kids, use a piggy bank to introduce saving. Show them that setting aside money today means they’ll have more to spend on something they truly want later. As they get older, explain the difference between needs and wants. Break down simple budgeting concepts, like making a list before spending money. Note: Even an allowance as small as $1 can be a good start to teach money principals to your children.
2. Involve Them in Budgeting
Let your kids see how you manage money. When grocery shopping, explain why you choose one item over another. Show them how to compare prices. If you’re budgeting for a family trip, involve them in setting spending limits. Real-life examples make financial lessons stick. Activity: Give your kids a budget and have them plan a vacation for the family; flights, hotel stay, rental car, food, and fun.
3. Use Allowances as a Teaching Tool
Instead of just handing over money, teach your kids to manage it. Have them divide their allowance into three categories: saving, spending, and giving. This teaches them balance—how to enjoy their money, be responsible with it, and share it with others. Note: A Hands On Approach is best; physically give your child their allowance and have them physically separate their allowances per your instructions.
4. Turn Saving into a Game
Make saving fun with challenges. Encourage your kids to set savings goals and reward them when they reach milestones. Whether it’s saving for a new toy or putting away money for a future car, helping them see progress makes financial responsibility rewarding. Activity: The Savings Match Game is a simple straight forward game where you challenge your child to save as much as they can in a given time period and you will match what they save. This is good for older kids saving for a higher ticket item.
5. Have Open Conversations About Money
One of the biggest mistakes we can make is treating money like a secret. Talk openly about it. Share your own financial wins and struggles. Let them ask questions. The more transparent we are, the more they’ll learn that managing money is a skill—not something that just magically happens.
Implementing These Lessons in Daily Life
Consistency is key. Here are a few ways to make financial lessons part of everyday life:
- Weekly Budget Check-Ins: Have a quick chat with your kids about where the family money is going. This normalizes financial discussions.
- Grocery Store Lessons: Compare prices, talk about sales, and show them how to shop smart.
- Real-World Money Decisions: Explain why you’re saving up for something instead of buying it immediately.
- Charity and Giving: Teach them the importance of generosity by encouraging donations to a cause they care about.
Final Thoughts
Teaching your kids about money doesn’t have to be overwhelming. Start small, keep it simple, and make it part of everyday life. As they grow, their financial understanding will grow with them. And who knows? Maybe they’ll avoid some of the financial mistakes we made.
🍻 Cheers to raising financially savvy kids!
Additional Resources:
Here are some great resources to help you teach yourself and kids about money:
- The Total Money Makeover by Dave Ramsey: A straightforward guide to managing finances.
- Mint.com: A free budgeting app that helps track spending and saving.
- The Opposite of Spoiled by Ron Lieber: A book focused on teaching kids the value of money and generosity.
