How to Help Your Kids Develop Respect for Money

The following post is by MPFJ staff writer, Laurie Blank.  Laurie is a wife, mother to 4 and homesteader who blogs about personal finance, self-sufficiency and life in general over at The Frugal Farmer. Part witty, part introspective and part silly, her goal in blogging is to help others find their way to financial freedom and to a simpler, more peaceful life.

The debt train is gaining speed in America, as shown by this article on Bloomberg’s website. It seems as if consumers’ love affair with living beyond their means is far from over. Part of the problem – in my humble opinion – is the lack of personal finance education in the lives of children, whether by their parents or their education system. How can we as parents help our kids to understand and value money so that they don’t head the way of so many who are deep in debt?


How to Teach Kids to Value and Respect Money

There are many different facets involved with teaching kids respect for money. Teaching them how to budget is one of them, but that doesn’t begin to touch the tip of the iceberg in today’s instant gratification world. Here are some ways you can help your kids understand and respect the role of money in life.


Teach Them about Emotions and Money

So much of overspending is rooted in the training we receive from media. Commercials show us that if we wear these shoes, drink this beer, drive this car or vacation at this exotic place we’ll be living the good life. They show happy, smiling people with perfect bodies and perfect tans, and seemingly with no troubles in life. The goal they have is to get us to spend money on their products.

We get the same messages in real life. We’re encouraged by our family, our friends, our fellow employees and our community to keep up with the Joneses. People question us when we drive older cars or live in a smaller house.

These messages tempt people to want to spend in order to impress others or make themselves happy, but most people know that the joy that comes with getting new and shiny stuff never lasts for very long. If we can teach our kids this truth, we can help them understand that true happiness comes from the inside out and not from the outside in, and help them avoid using money as a path to acceptance or happiness via ownership of “stuff”.


Teach Them the True Value of Money

The true value of money is rooted in freedom. When your debt load is non-existent – or at least super manageable – and you’ve got money in the bank, you have the freedom to make decisions based on other factors and not on whether or not you can afford it.

This means that you can take the lower paying job that you’ll like better, move to a different state or country, give to those in need when you feel like it or take a sabbatical from work in order to focus on yourself and/or your family.

If we can teach our kids that a healthy bank account balance and a lack of bondage to debtors equals true freedom and happiness, we can help them put potential purchases into perspective.


Teach Them How to Analyze Purchases

This goes along with emotions and money. It helps to teach kids to be able to analyze purchases before they make them. There are two main questions we can teach them to ask themselves before buying:

  1. What value will this purchase add to my life?
  2. Are there other things I want more than this purchase?

If the answer to either of these questions is more important that the purchase itself, that may be a sign that their money is better spent (or saved) somewhere else. Helping kids to work through the “whys” of a potential purchase will help them learn to avoid spontaneous spending that they’ll later regret.


Don’t Hand Them Money “Just Because”

Many parents these days give their kids money whenever they ask or buy them whatever they ask for at the store. When there’s no limit to money in a kid’s world, they’ll have a tough time developing respect for money – or for work.

In our house, the general rule is that we don’t buy them non-necessities unless it’s for birthday or Christmas presents. We also don’t give them money just because they ask or because they want to do something.

Instead, we help them figure out ways to earn money for the things they want. For instance, we have assigned chores that are done by each of our four children just because they’re a part of our family. We also have a separate list of chores they can do to earn money.

Just yesterday our second oldest asked how she could earn money to see a movie with a friend. I offered to pay her $2 for cleaning out the fridge and $5 for organizing my bedroom closet – both are jobs I’m not a big fan of doing. I got some needed tasks off my plate, and she earned $7 toward her movie excursion.

We’ve found that when our kids have to earn the money they get, they tend to be more cautious about how they spend it, and they also value more highly the items and experiences they get when they spend it.


Teach Them the Value of Spending, Saving and Giving

We basically have three choices with our money. We can spend it, save it or give it. All three choices have intrinsic value. Spending money on things that are important to us brings a sense of accomplishment as we fulfill our own needs and wants. Saving money teaches us discipline and helps us prepare a more secure future for ourselves. Giving helps us become detached from money and also helps us to realize the importance of helping others.

If we can teach our kids to balance the three choices they have with their own money, we can help them to develop a healthy respect for money.

Teaching kids to understand how to have a proper respect for money without idolizing it will help them prepare for a secure financial future that isn’t overshadowed by heavy debt payments.

How about you all? How do you teach your kids to respect money?

Share your experiences by commenting below! 

***Photo courtesy of


  1. We did pretty much the same as you did with “jobs”. Some were household jobs, (because you are part of the family), and others were for pay. However since we couldn’t pay much we encouraged the boys to find other ways to make money. Since we lived in a decent neighborhood and knew our neighbors, they both in turn, had a fudge making business. One used the profits as fun money, and the other saved to use it for several larger purchases. It had the side benefit of improving their working math skills, learning to shop sales for ingredients, interacting with people, and working with a deadline. Both are grown now and, I hope, have a better grasp of real life because of what they learned at home.

    • I love that they did a fudge making biz!!! We are working with our kids to be entrepreneurs too. I hope it sticks. Our oldest already has a thriving art business, and she’s a junior in high school! Thanks for sharing your experience, Olivia – I appreciate it!

  2. Love the advice in the article 🙂

    I have to say, as a grownup, I appreciate my parents never giving me money ‘just because’. Actually, they never gave me money for chores either, they only decided on a daily allowance and that’s it.

    While I found their rules to be strict back then, I somehow learned money is limited and doesn’t grow on trees. That’s one important money lesson I hope to teach my future kids as well someday.

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