5 Money Lessons for Children: What I Hope to Instill in Our Child


As parents, we all want to teach our children about money and how to grow, spend, and use money wisely.  My husband and I are knee deep in the new throes of parenthood and we have adopted the never-ending worrying of whether we are doing a decent job at raising our child.  Recently, we have been discussing our family values that we want to impart on our young one and how we plan to enact this.

One of the topics that we value and think is important is to emphasize the value of money– we really don’t want to raise a spoiled, entitled child (I’m sure every parent thinks that though!).

My husband and I are huge Warren Buffett fans, so we hope to teach our child(ren) money through having them watch The Secret Millionaires Club (hopefully if there IS screen time after the age of two, it is educational screen time, right?).  Other than watching The Secret Millionaires Club (which by the way, Warren Buffett narrates it himself!) we hope to teach our little one five principle money lessons.

Here are Five Money Lessons that we hope to share with our child: 


MONEY LESSON 1: delayed gratification

The first money lessons is delayed gratification.  Delayed gratification is one of the main predictors of success (more so than a person’s IQ will predict success) and I’m sure you’ve heard of the Stanford marshmallow experiment, where children were given one reward or two rewards if they were able to wait 15 minutes while the experimenter left the room.

The study showed that those children who were able to delay their reward for a bigger reward had better outcomes later in life.  We plan to start ’em young to try and teach them about the ability to postpone consumption to the future for a bigger perceived reward.  For example, they could have another doll now if they wanted but if there were able to wait until next month and were able to help with some chores they could get a doll set later on instead of a doll.

MONEY LESSON 2: Experiences vs things

Secondly, experience versus things is important to teach.  This will probably be very difficult to teach (my friend who has children already, said “haha good luck!” when I told her our plan to teach about time and experiences versus material goods).

We don’t plan on giving our child very many toys and will limit the amount of toys that we have.  If they want a new toy the child will have to get rid of one of the toys already in posession (to an extent of course), and by getting rid of, they could sell it at a swap meet or donate it.  We can use the 3 websites and apps to get rid of stuff and have a ‘get rid of it’ bin in our home.

Instead of offering a bribe a consequence of good behaviour, we will focus on experiences and offer those.  For example, if they do this and that, we can go to the Aquarium this week or to the beach (something that they enjoy doing), rather than offering them a toy.  According to Fast Company, science says experiences provide more happiness than material goods and we want them to value that as well.

I’m well aware I am being idealistic here and hopefully we can follow through with these idealistic #parentinggoals so we’ll see!

MONEY LESSON 3: compound interest

Similar to delayed gratification, compound interest would be an important aspect of money to teach children, and understanding the importance of starting early.  I wish I knew more about compound interest and investing when I started working at age 15, I would have gotten much more of a head start!  We plan to teach the child this during school age years, when they have the concept of math and growth somewhat down.

MONEY LESSON 4: empathy

Next money lessons is empathy.  Empathy and giving is important to teach children because they need to learn and appreciate money and the lack of it.  They should be able to empathize with others are are less fortunate.  Either this can be through donating their toys or contributing some of their allowance to the less fortunate with a charity of their choice.  As a child we got to donate new toys and useful stationary through a shoebox with Operation Christmas Child.  Even better yet, volunteering as a family to help and provide time and helping hands would be even more great (for example building a home or infrastructure in a developing country) as it would simultaneously satisfy my wanderlust.

MONEY LESSON 5: goal setting and money

Finally, goal setting is important to teach to children so that they understand you can use money to achieve outcomes and things that they may want.  I have personal finance goals that I set every year, for example.  That money or things they want don’t just magically appear (well, during Christmas time they might courtesy of Santa but other times of the year it won’t work lol).  Although money doesn’t buy happiness, it can get you more options and give you more freedom.

Perhaps one way to achieve multiple lessons on money is by getting them to save their allowance money with the three jar method (one jar for saving and investing, one for fun money or spending immediately, and one jar for giving would be an easy way for them to learn about Goal Setting, Delayed Gratification, Compound Interest, and Empathy.

Most important of all, children are watching your EVERY move.  So if you are trying to teach your children these five money lessons, and they see you spending $8000 on an Hermes bag because you felt like maxing out your credit card this month, then you might as well not bother trying to teach them about money lessons. You are their role models and they will follow what you end up doing and will likely adopt your money values.

Readers, what money lessons do you think is important for the future generation to learn and how do you plan on doing this?


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About genymoney

GYM is a 30 something millennial interested in achieving financial freedom through disciplined saving, investing, and living a minimalist lifestyle.

14 comments on “5 Money Lessons for Children: What I Hope to Instill in Our Child

  1. All 5 money lesson are spot on. It’s true children watch your every move so you have to be a good role model. My kids are young adults now and they have the money lessons, they need to know how to execute them. Starting bank accounts, investing, credit cards, registered and non registered accounts it’s all a learning experience for them.

    • @Steve- Exciting! Yes, a steep learning curve at that. My infant son is already watching my every move, even when I have my iPhone in my hand (which I try not to use, the best I can in this smart phone addicted life we lead!).

  2. Hey GYM!

    Love all of your points here!

    I don’t have any kids yet, but I agree w/ teaching them about money lessons and gratitude at a young age. If we don’t, they will feel entitled to everything.

    One of my dad’s friends just purchased an iPhone X (upgraded from an iPhone 7 Plus) for her 12-year son. She generally buys him the latest gadgets and trends made by Apple. She explained her rationale behind the purchases, and it’s because she doesn’t want her son to dislike her… I thought this would be a bit excessive, but is it common for parents to feel this way? That they’re afraid their kids won’t accept them? I really hope I won’t become a hypocrite when I have kids >.< *knock on wood*

    For me, I really hope my future kids will understand all the points you mentioned in this post. Especially w/ compound interest, this is something I wish I knew when I was Warren Buffett's age! haha… If kids have that kind of mindset, they'd be set! That just gives them a really long time horizon to invest hah! But of course, they don't……….. Warren is just 1 in a gazillion……………

    fin$savvy panda @ finsavvypanda.com recently posted…10 New Year’s Resolutions that Will Improve Your Finances for 2018My Profile

  3. These lessons are on the ‘money’…ha! We are working on #2 right now by limiting on the toys for Baby with Cents and rather have him to get into books and it’s working so far. He loves flipping though the pages and pointing out the pictures. We hope that as he gets older will enjoy reading them and you can learn a lot by reading books.
    We are also taking him out more to places like the petting farm, zoo, and going on a steam train. He is enjoying it so far and hope it continues rather than looking to buy him toys.
    Kris recently posted…Giving RecognitionMy Profile

    • @Kris- Haha, very punny! We are trying this too though he doesn’t seem that interested in toys anyways at his young age. Glad to know that it’s working! One way to slow this even further is preventing them from watching commercials on TV of the latest toy (like that $80 toy that was all the craze last year, I forgot the name.. Furnimal or something??). Those commercials targeted towards children are pure evil!!

  4. These money lessons are great! This is something the grandparents need to know as well. For #1 and #2 the grandparents tend to spoil my son. New toy each time he wants, candy each time he cries for it…..I’m starting to find it annoying. My son knows he won’t get it from us, so he learned to manipulate them instead lol.
    Melanie, Mommy Finance recently posted…How This Crazy Challenge Can Immediately Help You Focus on Important ThingsMy Profile

    • @Melanie- Oh that’s hard to fix but I think doable with a good heart-to-heart talk with the grandparents- grandparents love spoiling their grandchildren!

  5. This is a great list! I especially love #3. One thing I’m still trying to figure out is how to start teaching these lessons in age appropriate ways. Maybe it will be easy as they get older and will come naturally when the time is right (I hope).

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