7 Most Important Things to Teach Your Kids About Money

With so much information coming at us from all angles these days, it can be difficult to know what is helpful and what isn’t when it comes to raising kids who are responsible with money. If you’re not careful, your child could grow up believing a lot of half-truths or outright fallacies about personal finance that can have negative consequences for the rest of their life. In truth, there are thousands of things you could teach your kid about money. But with so many other responsibilities competing for your attention, it can sometimes be challenging to know where to start. Here are some of the top things you should teach your kids about money:

Make smart financial decisions

One of the most important things you can teach your kids about money is to make smart financial decisions. By this, we mean encouraging your child to make sound, long-term decisions with their money. This means they will learn to save (not spend) their money and make sure they are putting enough away for the future, such as to cover university costs, retirement or other big expenses. Your child is likely to be in their 20s and 30s when they have kids, so it’s their job to plan ahead and save enough money to cover those costs, rather than relying on their parents to fund their upbringing. Making smart financial decisions also means understanding the importance of how you use credit. Credit is a very useful tool for many adults, but it can also be very dangerous if used irresponsibly. Help your child learn how to make the most of credit (when they need it) without abusing it.

Build a cushion of savings

Another important thing to teach your kids about money is the importance of savings. This is something that people tend to overlook, but it is crucial for long-term financial health. Most adults in the U.S. don’t have enough saved for retirement. While there are lots of reasons for this, one of the main ones is that they started saving too late. By the time they were in their 30s or 40s, they had missed out on years of compound interest that would have significantly boosted their savings. By the time your child is in their 20s or 30s, they should already have a significant amount saved. Start teaching your child to save when they are still in their teens. If they get into the habit early, they will be well on the road to financial success.

Be wary of debt

Debt is one of the biggest financial problems people face today, but many kids are not taught to be wary of it. This can have a terrible impact on their finances in the future. Your child should understand that there is nothing positive about taking on debt, such as credit cards or student loans. Debt is a negative thing that can weigh you down for years if you’re not careful. If your child has to take out debt, such as for a car, student loans or a mortgage, they should understand that they need to be very careful to make sure they can pay it back. Many people have had to declare bankruptcy thanks to credit card debt or other unsecured loans. This can devastate a person’s credit rating, making it difficult to get a loan in the future. Your child should learn to be wary of taking on debt of any kind as soon as possible.

Understand the cost of owning something

One thing many people fail to consider when taking out a loan, such as a credit card, is the cost of owning the item in question. Most people focus on the initial price of an item but don’t think about how much they will have to pay in interest over the years. Your child should be taught to understand the cost of owning something, both in terms of their initial payment and in the cost of interest they will pay over time. They should understand that things typically cost much more than their sticker price. Many people have a house that costs far more than they expected thanks to maintenance costs, property taxes and other expenses associated with home ownership. Your child should understand that buying something on credit is like signing up to pay a loan. They should think long and hard before they do so because they will owe that money until they pay it off.

Don’t be in a hurry to buy

Kids are growing up in an age where everything is available on demand, thanks to the internet and apps such as Amazon. They can shop from the comfort of their own room, and delivery is often just a few hours away. Why does this matter? Because it’s teaching kids to be impulsive and, more importantly, that it’s OK to buy whatever they want. Kids should be encouraged to save their money as much as possible, and not to buy things they don’t need. This is especially true for teenagers who can often be impulsive with their money. Your child should be encouraged to think about whether they really need something. If they have enough money saved up to buy it now, then that’s great, but if they don’t, they should wait. Your child will thank you for encouraging them to save their money when they are older.

Take care of what you already have

Most kids love to collect things, whether it’s baseball cards or toy cars. There is nothing wrong with this, but your child should be encouraged to take care of what they already have. This means being careful not to break what they collect, as well as storing it properly so it lasts as long as possible. Your child might not appreciate how important this is now, but in 10 or 20 years, they will be happy that they took such good care of the things they owned. If your child has toys or other items that are in good condition, it might make sense to sell them online when they are no longer interested in them. This can be a great way to earn some money for the future.


There are thousands of things you can teach your children about money. By the time they are grown up, you will want them to be financially independent. There are many things that can help them reach this goal. What you will have to do is decide on the priorities and then start to teach them. However, there are seven things that you should teach your kids and they are to make smart financial decisions, build a cushion of savings, be wary of debt, understand the cost of owning something, don’t be in a hurry to buy, take care of what you already have.

You can be more proactive with your kid’s financial education by downloading Kiddie Kredit. We will be partners in establishing responsible practices concerning money, so subscribe to our newsletter now!

Evan Leaphart

Evan Leaphart is the founder and CEO of Kiddie Kredit and the co-founder of Black Men Talk Tech. He creates online curriculums for schools, organizations, and families to teach children about the fundamentals of finance.