Raising a Money Smart Kid

Penny the Pig at the Central LibraryDoes trying to raise a money smart kid mean that you want to come home to a little Gordon Gecko calculating the P/E ratio for their next stock purchase? Probably not. Although my preschooler would look great in a power suit, I think I would rather focus on giving her the tools she needs to make thoughtful decisions about her personal finances based on her values. How in the world do I do that, though?

Well, first I should probably figure out what I would like to emphasize with her. Thrift? Philanthropy? Entrepreneurship? Self-reliance? Not whining at me in the toy store? Then comes the time and patience part, where I model good financial decisions. I explain the choices I am making and why I am making them. When my daughter comes with me to the grocery store, she not only gets to find foods that are green and start with the letter “B”, but she hears me talk through comparison shopping and explain how debit cards work and where the money came from that we are using to buy the vegetables that she will refuse to eat.

Design A Dollar Station at the Central LibraryThe interesting part is giving kids a chance to practice making good decisions. This can include playing board and computer games that involve earning money and choosing how best to spend it. Real world practice is a little riskier, but I would rather have my kid make her mistakes and learn from them now with $2.00 at the thrift store than 15 years from now with a credit card. Signing up for a library card, not losing it, and choosing and remembering a secure PIN also develops helpful personal finance skills. Lemonade stands and similar endeavors build an understanding of economics and entrepreneurial savvy.

Reading books together that are fun and interesting and just happen to have to do with money is also a wonderful opportunity to talk about making financial decisions. Here are some of my favorites.


Comment below and let us know:

What financial values do you want your kids to have?
How do you teach your kids to be money smart?

One thought on “Raising a Money Smart Kid”

  1. Great concrete examples Robin, on how to build your child’s financial vocabulary, right from the start. You nailed it! Great book list for all ages.
    I love the saying “It’s not in our budget right now” instead of saying “we can’t afford it”. Kids don’t connect with we can’t afford that toy, and then you spend $100 at the grocery store.

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