Should we be messsaging kids more about money?

In today’s society, kids are bombarded with messages. Hundreds of messages like:


Don’t speak to strangers or take their candy

Don’t smoke

Don’ drink or text and drive

Use protection

Wear sunscreen

Don’t swim after eating

The list goes on and on and on.


But no-one is messaging to kids how they should be managing their money.

Messages like these should be used on a daily basis.

Watch what you spend.

If you spend more than you earn, you will drown in debt. Use your credit card responsibly

It is easier to spend than it is to earn

You cannot spend a dollar twice.

It is ok not to spend money and save it instead

What are your money choices?


With this in mind, it is imperative we address personal finance as early as possible. Parents can teach their children about money in numerous ways. Kids need to learn that money is not FREE. It must be earned.

While I have mixed feelings about paying kids to help around the house, as they should be contributing to the home environment as a decent member of society, allowing them to earn an allowance by taking on added tasks may work well. If kids want extra money, they can take on extra jobs but should still be required to keep a tidy room, help with dishes etc. as a productive family member.

Parents who want to use allowance to teach their kids about money, check out The No-Cash Allowance by Lynne L Finch. It is a great book for parents to follow and has creative ideas.

Parents can also use the envelope system with children as early as 5 years old. Every time the child receives money, they must divide their money between their envelopes. One for Spending and one for Saving. For those parents who want to teach their children the importance of giving, they can add a third envelope. Personally, I prefer children give their time instead. This way, they may develop a greater appreciation of how helping a great cause makes a difference. Giving money is not as personal and may be a little difficult on a tight budget but one can contribute their time which is of value too.

A child needs to realize once their money has been spent, there simply is no more. This will help a child realize the value of their money and the need to spend it wisely.

The envelope system can also be used by teens. It is a great way to teach budgeting. Teens need to realize they can only spend a dollar once. They have infinite wants and finite resources. Therefore, they need to make wise choices. By getting them to realize they have to make wise choices, and If they do not buy a product immediately, their lives will not come crashing down around them. They should also learn there may be alternative and potentially more cost effective products available for them to choose from.

Another question teens should ask themselves is do they need the product?

Teens also should be aware that stores and credit cards may allow them to “borrow” and spend money they do not have. What they need to understand is; if the store or credit card is not paid off within the contractually agreed to time, they will be required to pay interest on the amount spent, quite often to the tune of 20 cents for every dollar spent. If that interest is not paid off immediately, it will ultimately result in interest being paid on interest. That is called compound interest. When you are earning compound interest, it is terrific. When you are paying it, it stinks.

To discover more about how money habits can affect your financial health and wealth, play our online game CashCrunch 101