Teaching Finances to Kids

“Children who reach the age of eighteen with their entire skills set composed on Nintendo and eating Doritos have been neglected. Their parents neglected to give them the character traits necessary to live successfully.”
-Dave Ramsey


I received a recent email from a gentleman named Will.  He suggested covering the topic of how to teach proper financing to your kids.  This is a topic that I’m not sure ever being discussed on any other Manosphere sites I’ve frequented so let’s dig in!

For this discussion, we’re going to cover the four financial allocations your money goes (or in this case, your kid’s) and the importance of each.  We will also discuss how to go about teaching your kids why they should control their finances, even at an early age.

Finance Management

Teaching basic finances to a small child is a tough task because it contains many aspects that are foreign to them.  Retirement? Mortgages? Emergency funds? What about the Barbie dolls and ice cream funds?  Like many other topics, you will need to simplify these issues to something they can grasp.

This is an excellent time to teach them some lifelong lessons such as delayed gratification and opportunity costs, even if you don’t use those terms.  The earlier you can start teaching your kids about finances and budgeting, the better.  If they’re old enough to know basic addition and subtraction, they’re old enough to begin learning the basics.


This will be one of the fields that will be most boring for kids.  Why have a piggy bank full of money that you’re not going to spend???

You should explain to your child that there might come a time that they may need to have a lot of money for a big purchase.  If they’re still very young, don’t scare them with the discussion of why you need an emergency fund, but you should begin instilling the idea that it’s wise to save money.  One day they will want to buy a car, a house, or a mega-deluxe, 10,000 piece Lego set.

The next step is determining how much they should save.  I follow the Dave Ramsey approach and suggest at least 10% of their income, or in this case, allowance.  While they are still young and aren’t obligated to pay bills, taxes, etc., you should encourage them to save well above that amount.


For some kids, the thought of investing will pique their interest.  Like savings, keep it simple.  You don’t need to explain 401Ks, Roth IRAs, and compounded interest.  Rather, explain that they can put their money in the bank, who will loan that money out to others, that will eventually pay it back with an additional “reward.”  For young kids, something simple and relatively liquid like a CD is a safe bet.  Again, since they are young, encourage them to invest a large amount as this can REALLY add up by the time they are 18 years old.


While saving and investing is prudent, you should also encourage your kid to spend some of their hard-earned money.  It’s all about balance.  They should understand that money is both for serious matters, but also for fun!  If they aren’t having any fun with the money they’re earning, they’re going to view finances as something boring or unpleasant.  If doing a budget is a source of pain instead of excited anticipation, they won’t do it when they’re young and they certainly won’t do it when they grow up.


This last section to teach your kids about is all about keeping things in perspective.  Let’s be real.  Kid’s love to throw fits about anything that doesn’t go their way.  Teaching them why it’s important to give to a charity and getting them involved in that charity through some hands-on project will help show them just how good they have it.

Let’s take an annual charity our church does each Christmas.  Every December, my church puts up a Christmas tree and hangs little index cards with lists on them.  Typically, the items are school supplies, small toys, and clothes.  These items go to kids in the community that can’t afford these items and would have to otherwise go without.  A good project we will be doing with my kids this year is to have each of them choose a card and then take them out to by the items on the list while explaining why we’re buying them.

Your children shouldn’t take their situation for granted.  They should be thankful they have parents that are able to provide for them.  This helps create empathy for others.  It’s easy to complain about not having the newest video game system until you realize that there’s a kid 3 miles down the road who isn’t even getting presents for Christmas or is wearing shoes so old that the soles have holes in them.

Next Steps

Take some time to sit down with your kid and teach him or her the importance of tracking where their money is going.  Help them create a budget.  Give them some envelopes and label them as Savings, Investing, Spending, and Charity.  Whenever they receive some money, whether it be their allowance or birthday money, help them split it among the envelopes.  Encourage them to remain disciplined and remain patient when they can’t control their impulses.  Consistency and diligence, like many other topics, are key.

When they get older, I would highly recommend getting them into a finances course like Dave Ramsey’s Financial Peace University or something similar.  There are many options out there, but I can tell you from personal experience that Dave Ramsey’s course is both informational and entertaining.

Finally, let them see how you and your wife handle your finances as well.  This is not only leading from the front, but it teaches them how to properly budget when there’s a second person involved in the decision making process.

Thank you, Will for the suggestion.  If any other men out there have suggestions for topics to cover in future posts, please email them to me and I will be happy to discuss them.

Author: Jak

Jak, married and father of three, seeks to help the Red-Pill Community take its next step past the petty cynicism and ineffectual anger. While he recognizes that men are significantly handicapped by the modern legal system and culture, he doesn't accept that traditional marriage is untenable in today's social climate. Rather, men must be willing to adapt to this new world by implementing new tactics and approaches to maintaining a balance of power. Jak is here to provide you with these lessons.