The Simple Way to Teach Your Child About Money

We all want our children to be more financially able than we are, but we don’t know where to start. How do you set your child on the path to becoming financially savvy?  How do you teach your child about money?

It’s easier than you think.

How Do We Teach Our Children About Money?

The short answer is… we don’t.

Two things conspire against teaching our kids about money. We don’t teach it either because we don’t know how to, or because money is a topic of shame. Instead, we say, “it’s private.”

So because we don’t talk about it, we act as if our children will just naturally one day “get it.” But is that true? On a closer look, we see that some skills can be learned naturally and others need more guidance.

  1. Certain skills just need practice—it’s just a matter of coordinating our innate resources. These are things like walking and eating.
  2. Certain skills need more than that. They have certain rules and build upon our innate resources. These are things like learning how to play a sport or cooking.

Learning how to use money is a category 2 skill, yet we treat it like a category 1 skill. We think, “We all use money, so the more my children use money, the better they’ll be at it.” The rising debt levels and under-saving by the average American tell us that our assumption that children will magically turn into money savvy adults just isn’t true.

For your children to master money, you have to guide them. The nice thing is that getting them started is pretty easy. It all starts with a simple question.

(Related: How to Have the Money Talk with Your Child)

The One Question That Helps You Teach Your Child About Money:

“Hey, that’s a nice drawing. Can I buy it?”

I’ve found “Can I buy it?” completely reframed my children’s view of what was possible. In my children, it initiated a lightbulb moment. They couldn’t believe that they created something that could be sold, just like in a store.

This has led to my 8 year old daughter saying to me last month: “I saw a renovated home and I wanted to buy it to open up a store. But then I realized the location wasn’t very good.”

My son, saying last week: “When I’m 7, I want to learn to be a better investor.”

They’re excited about money and have positive associations with it.  Now why this approach? Why not give them an allowance? Why not make them earn it through chores?

  • Allowances: They think money falls from the sky. This disassociates them from how money is earned or made. This works if you’re preparing your children to live with a trust fund.
  • Pay for Chores: This isn’t bad, but for me, I didn’t want to incentivize them to obey me with money. This works if you’re preparing your children to work a job.

Reasons Why “Can I Buy It?” Is So Powerful:

  • Prepares Them for the Future: “Can I buy it?” prepares them to be makers. In the Automatized Age, many jobs are going away. Learning how to not only make, but make a business, will become more increasingly more important. How many of us as adults have an idea that gets stuck in the graveyard of our minds because we don’t know how to make it a reality, or are too scared to even try? Some of the best goods or services of all time are stuck in our imaginations.
  • Motivates: That same night, my daughter and son started their own “stores” in our basement—drawing pictures, making book marks, etc. They put prices on each one. They gave their stores a name. If your child doesn’t naturally do this, you can “nudge” them by saying something like I sure wish there were a store where my friends and I can buy more of your drawings.
  • Makes Them Resourceful: They are figuring out how to do more. There were times when they ran out of money and didn’t have any to spend when we were doing Target store runs. They reacted by creating something to sell me. For many, running out of money induces panic and paralysis. It’s hard to teach the instinctive reaction that if you run out of money, you can apply your resources to make money.

Now, the potential downside to this is that your children might only be motivated to create and to draw to sell something. I’ve not found that to be the case. Why? Because if you treat it as the entry to other businesses, they start focusing on those businesses. My kids still draw as a way to have fun and don’t try to sell most of what they make because they know how much more effective the lemonade stand is.

This is the money cycle: Earn Money Spend Money Save & Invest Money. The question “Can I buy it?” starts them on the first. You’ll need to ask them additional questions for parts 2 and 3 of the cycle.

Follow Up Questions that Further Teach Your Child About Money:

  • Do you want to try selling to others? After a few rounds of doing this, my children were tired of selling to their parents. They wanted to try selling to new people.
  • What is the best thing to sell to others? We went into the pros and cons of various things. Ideas we went through are: drawings, paper key chains (yes, some ideas should just stay ideas), origami boats, cookies, and lemonade. Once I taught them about the effort it would take to make 20 drawings vs. selling 20 cups of lemonade, they chose lemonade. They now understand the importance of scale.
  • What do you plan to do with the money? This is a good lead-in to teaching the “spend” part of the cycle. You may be as surprised as I was how their approach to spending changes once they’ve worked for their own money. My kids have become quite thrifty.
  • Can I show you the power of investing? This is a good lead in to teaching the “save & invest” part of the cycle. You may also be as surprised as I was how receptive they are to learning about how to grow their money, and how much easier it is to teach them about investing once they have a relatively large amount of money that they earned.

The Power of Questions:

My children have already started a few businesses. Last summer, they made hundreds of dollars. This all started with a question.

Questions can change lives. They can set people on a pathIf you sit them down and said, “Hey, let me teach you about what money,” get ready for yawns or glazed eyes. You’re wasting your words. It’s important to teach it in a way that sticks.

So how do we do that? I’m a big believer in the school of life—that something takes root when you’ve been learning and using something, when you’ve explored its curves and felts its contours early on. You want it to be so that they no longer hear your voice, but make their own decisions based on a solid foundation you’ve helped lay for them.

Then, one day, they’ll ask themselves their own thoughtful money questions.

FREE Guide to Help Your Child Start Making Money Download

After “Can I buy it?,” your child might want to sell to someone other than you, like my children did.  Time to take it to the next level and help your child start their first, real business.  Reading about helping your child start a business is a good start, but the real learning and habit formation starts by doing.  I’ve found it helpful to have a quick, easy-to-understand guide.  Just fill in the form below, then click “Download” and I’ll send you the FREE guide!

Help your child launch their first business the right way with this FREE Lemonade Stand Guide, exclusively for subscribers.  It’s a perfect, quick, and comprehensive companion to helping your child learn how to make money like a pro.


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  • Adiba anwar June 5, 2017 at 4:20 pm

    Thanks for sharing

    • JT June 5, 2017 at 7:20 pm

      You’re welcome! Thanks for dropping by. Hope to see you around more 😀

  • Angie June 5, 2017 at 4:23 pm

    Really good ideas. Honestly can’t stress teaching kids about money EARLY on and continuously. Right now we’re teaching them to put in their money to long term, spending, and charity. I love your questions you mention. Get them thinking about money. Thanks for a great article!

    • JT June 5, 2017 at 7:23 pm

      Angie, I’m so encouraged by your comment, knowing that parents out there are being thoughtful and intentional with teaching their kids about money. Your kids will thank you!

  • Vanessa June 5, 2017 at 4:40 pm

    This is great! I’m usually spending my $$ before o made it! Changed my mindset 🤙

    • JT June 5, 2017 at 7:21 pm

      Thanks Vanessa! I think many of us have that spending pattern. Keep me posted on your money journey!

  • Cath @ Get Money Wise June 5, 2017 at 7:47 pm

    I really love this approach. Encouraging the entrepreneurial spirit in our kids is going to be really important for their future. My kids are a little bit young for this approach but I will remember this for a few years time.

    • JT June 5, 2017 at 9:07 pm

      Thanks so much, Cath! I believe that behind most proficient skills are many hours spent practicing those skills. One day, people will remark that your kids are “naturally” good with money. What they won’t realize is the work you put into making it “natural.”

  • Gina September 14, 2017 at 10:52 am

    This is brilliant! Thanks for sharing, I’m so inspired to teach my children this concept!

    • JT September 15, 2017 at 10:50 am

      Thanks Gina! It’s amazing how 1 question can have such a big effect. Oh the places they’ll go! Good luck with asking your children and let me know how it goes!


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