Financial Literacy Month: Teaching Your Kids About Money

April is Financial Literacy Month and it’s the perfect time to think about this subject and ways to help make you and your family more financially savvy! During this month, I have been asked several times by others in the financial world a simple yet personal question: “What do I wish I had learned as a kid about money that I wasn’t taught?” That got me to really thinking about the subject of personal finance in a little bit different way.

April is Financial Literacy Month and there's no better time to teach financial literacy for kids and adults. Here's how kids can learn more about money.

Almost everything I ever learned about money and personal finance as a child I learned from my parents. Schools just didn’t spend very much time teaching about that and surprisingly even today, some 60 years after I went to elementary school, they still don’t!

The Current Trends

In recent years, an overwhelming number of parents are calling for personal finance to be made a part of the school curriculum, predominantly in our high schools. Even so, it just hasn’t happened and there are several reasons why. Here are a few:

  1. According to a study by the National Endowment for Financial Education, only 1 in 5 teachers feel they’re “qualified” to teach this subject to their students.
  2. Personal finance questions are not included in standardized tests like the SATs.
  3. The federal government has no authority to mandate that this subject be taught in the school curriculum.
  4. State educators can’t agree on what or how to make it work so as of yet little has been done.

While at least the discussion is going on, progress has been negligible. However, there is some good news out there and it is coming from places that you may know and also from some that you may be surprised about. Teachers are seeking training through the school systems’ local and state programs voluntarily. Parents and kids are learning from some of the biggest banks in the country about it too.

Banks like Bank of America in partnership with Khan Academy and Wells Fargo are offering tons of information in written brochures, seminars, and online information to help in the education process of financial literacy and its understanding. Not only for kids, adults are encouraged to find out as much as they can for themselves in order to help themselves and their children.

Simple Things You Can Do at Home with Your Kids

Here are some ways you can start your young children learning about money and the decisions that they will face in their financial future. It seems while some help is out there, the real responsibility lies on “Mom and Dad” to make sure a child has the right information to succeed when it comes to financial literacy, at least for the foreseeable future.

1. Teach your kids to count and sort money

Starting around 3-4 years old is a great time to “play” with coins and bills to help your children recognize, count, sort, and understand their value. Make it a game and make it fun and then reward your child with a small allowance of “money” so they can use and understand what it can purchase.

2. Teach them 3 basic principles

When they are a bit older and have money, teach them about these 3 basic principles: saving some of it (like 20%), being charitable with some (like 10%), and spending within their means (the remaining 70%).

3. Learning about wants versus needs

I’ve written about this subject many times, and understanding about it is so important. The sooner a child learns about it, the better. One way to teach a young person around 8-10 years old is after they have accumulated some of their own money, either through an allowance or working around the house on little jobs like washing the car or walking the dog, take them shopping with their money. They will then have to make some decisions about what they want, what they need, and what they can actually afford to spend.

4. What is credit, what does it cost, and why it is important

At some point, even as young as being a young teen, your child will hear about things like credit cards and loans. You can educate them right at home by starting with things like your mortgage or your car loan to teach them about it. There is a need for credit in some really important things in life and a child needs to understand that borrowing money for some purposes is actually a good reason for debt. Spending on necessities that are really expensive is a far cry from running up credit card bills irresponsibly for things that are just for fun and you can’t pay for from your income each month.

5. The ins and outs of banking

Help your child understand what a bank is and does and how you can use it for things like saving, paying your bills, having a checking account, investing (more on that next), credit, and retirement plans. You may even introduce them to the banker and financial people at the bank itself. Talk to them about the banks’ advantages like the internet banking options, a language they will understand, maybe even better than you do.

6. Investing in the “Market”

One area I personally knew nothing about as a youngster was the stock market. Come to think of it, despite many years dealing with it, I probably have to admit I don’t know very much more to this day! But, having said that, it is important to try and explain how the financial markets work and how things like stocks and bonds matter. Investing is a tried and true way to build a financial future for people, even if it is only investments used to fund a solid retirement plan strategy that they will need in their adult lives.

7. Budgeting

If there is one thing I know that will be of the utmost importance in life, it’s making and living within a budget. Not doing so will insure a person has financial problems in life, some of which can be catastrophic. No matter how rich you may be, not tracking and controlling your income and expenses will cause you grief and that is the message you want to teach your young adult as soon as possible. I often use the examples of celebrities who earn literally millions of dollars each year while they have their fame at its height, but then fall into financial ruin after the spotlight fades because of really bad money decisions and excess spending as if that money would last forever. You can look it up, as they say, if you don’t believe me!

For more tips on financial literacy for kids, check out How to Teach Your Kids About Money.

This April, think about you and your children and the financial literacy that you may need to improve upon. It’s never too early, or too late, to start to make your money work harder and smarter and “now” is always the time to do just that!

Have you begun teaching your children what they aren’t learning about personal finance in school yet?


  1. As you know this is a topic that is near and dear to my heart. There is so much great information available out there to teach both kids and parents on the topic. There is no need to reinvent the wheel. You mentioned one of the traps I believe our school systems fall into “standardized tests” I do agree we will face a number of them during our life, drivers test is one that comes to mind, but we also need to prepare student for life. Life skills, literacy in finance, technology is so important too.

    If I had a dollar for every time I heard my teenagers frustrated while doing their homework say “when will I ever use this in my life” I’d be a rich man.

    1. I understand the frustration that your kids have. I went through the same thing myself, often wondering when I would ever use trigonometry for any purpose in life. I think that’s why it’s so important for parents to be involved in financial literacy with their kids. Until such a time when the educational system realizes this and changes, it will remain up to the parent. Thanks for your comments, Brian, and for all the good work you do in this area.

  2. Beth @ The Money Pixie

    You’re right. Teaching kids about money early on will serve them for their whole life. I think all of this should be required learning in school, but since it isn’t, you’ve got to do it at home.

    I started working when I was 11 years old, and haven’t stopped since. It taught me the true value of a dollar and the difference between what I wanted and what I needed.

  3. I think another great thing to do is to reach out to schools and request that more of this be taught (or inquire how it is currently taught). I *love* it when families try to support the curriculum at home.

    And honestly when it comes to changing curriculum, stakeholders (not teachers) have the real say!

    This is a really important post, Gary. I’ve got this bookmarked for Half Penny!

    1. Great point, Penny. When parents get involved in the education process, whether it be directly with the teachers or with the school administration, there’s always the chance that changes will be forthcoming. Unfortunately not many make that a real priority. I hope Half Penny will enjoy reading about this with you in the future! 🙂 Thanks for commenting.

  4. Love it! I recently read a book on this topic and was surprised by how much I didn’t know. It covered most of the things on this list, and talked about how delayed gratification was really important to learn young, even before they can grasp the physical money concepts, as it underpins so many negative financial behaviors later.

    1. It’s so important to learn this as a child because it definitely does develop a mindset and habits that are hard to break when you’re older. I also liked the idea of my children understanding what is affordable and what isn’t. In some ways that may inspire them to take their careers in a more serious manner. I’m not certain that’s the case, but I think it might be.

    1. I definitely believe in participating in parent-teacher collaborations and bringing up this subject to the teachers and/or the school board is a great idea. Perhaps some teachers feel since it’s not part of the “curriculum” that it really is the parents’ responsibility. Either way, the parent should educate the child in financial matters whether the teachers participate or not. Thanks, Jamie.

  5. Ann

    Such good suggestions, Gary! This is definitely a subject that I have focused on more heavily recently with my daughters (who are 14 and 16 years old). Financial management and consumer math will continue to be a big part of next year curriculum as well. We have not covered budgeting, as you recommend. That will be something that we’ll need to address and have them create. They’ll be in much better shape going into their college and young adult lives than I ever was.

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