Teaching Financial Intelligence to Kids

If you are like most parents, at one time or another, you’ve had to humble yourself and ask one of your kids for help operating your smartphone or accessing a streaming service on your fancy new television set.

Let’s face it, younger generations have a seamless relationship with technology that adults don’t always have. But just because they are whizzes with screens, does not always mean they understand fundamental necessities such as how to wash their own clothes, or how money and banking works.

Teaching kids at an early age about money, how it applies to their lives, and the importance of saving, are critical lessons to ensure young people grow up with good habits when it comes to managing their own finances. And while they don’t have to understand how hedge funds operate or the ebb and flow of interest rates, they do need to know the basics.

Here are some general tips that you can use to give your kids a broader financial picture.


Many parents shy away from talking about money with their kids, and while you may have good reasons for keeping your household income private, you should be open to discussing the topic in simple terms. Start by explaining that things cost money and that you have to prioritize your purchases based on what you have saved. This enforces two economic principles: Don’t spend what you don’t have, and if you really want something, you need to earn and save enough money to buy it.

Earning Empowerment

Depending on the age of your kids, encourage them to earn their own money. It can be as simple as dog-sitting or cutting the neighbor’s lawn. Whatever the job is, your kids will feel a sense of accomplishment when they get compensated. And they’ll begin to see the correlation between work and reward versus the idea that their Xbox just magically appeared one afternoon.

Setting Goals

Everyone benefits from setting goals, and kids are no exception. Once you have explained the fundamentals of how money works and encouraged your kids to get or create a job, then help them set goals that can be tied to anything from a certain dollar amount in savings, to helping pay for their own Mother’s Day gift. Having defined goals will foster their motivation and ultimately provide a source of pride when they reach their target.


Most kids probably have a vague notion of what banks do, but are generally fuzzy on the details. As you move along your tutorial path, reach out to your bank and inquire what resources they have when it comes to helping kids get started on their way to financial independence. Even if this means stopping in one afternoon to spend ten minutes with a manager, giving kids a more in-depth perspective on the value of financial institutions may inspire them even further, and will certainly lend credibility to their saving initiative.

Good Habits

As the saying goes: Little pitchers have big ears. Our kids are always watching and learning from adults whether we realize it or not. Demonstrating good habits when it comes to your own finances is leading by example, and can be a great way to interact with your kids relative to real-world situations such as mortgages, car payments, or how long it took to save for that extended vacation at Disney last summer.

These are just a few tips on how to educate your kids about money. As your children become more engaged, together you will no doubt think of additional fun and creative ways to help them along their journey. Just don’t expect them to stop rolling their eyes the next time you forget how Netflix works.