Teaching Your Kids About Money and Investing: A Parent’s Guide
As a relatively new parent, I now truly get what my parents meant when they said, “We just want what’s best for you.” And that includes helping our kids avoid thinking that money grows on trees—or worse, that it magically appears when you swipe a card.
While schools cover everything from algebra to amphibians, financial literacy often gets left off the syllabus. That means it’s up to us to teach the next generation how to spend wisely, save purposefully, and invest for the future.
But don’t worry—you don’t need to be Warren Buffett or hold a PhD in compound interest. With a little creativity and some real-life lessons, you can help your child develop a rock-solid foundation in money smarts. Here’s how:
1. Pay Yourself First (aka “Future You Will Thank You”)
One of the best financial habits you can pass on is the idea of “paying yourself first.” Translation: before spending any allowance, birthday money, or lawn-mowing cash, a portion goes directly into savings.
Whether it’s a piggy bank, a custodial savings account, or a high-tech investing app, the goal is to build the habit early. For a fun twist, turn saving into a game—set challenges like “Save $20 and unlock a special treat,” or track growth with a colorful chart or spreadsheet. Watching their money grow gives kids a sense of ownership and control—and who doesn’t love watching numbers go up?
💡 Helpful Hint: Let them name their savings jars (e.g., “LEGO fund” or “Future Car”)—it makes the goal more real and more fun.
2. Money Makes Money (And That’s Magic You Can Explain)
Ben Franklin flew a kite in a lightning storm, but he also dropped this gem:
“Money makes money. And the money that money makes, makes money.”
That’s compound interest in a nutshell.
Thanks to today’s higher interest rates, even a simple savings account can show how money grows. But if your child is ready, level up to a custodial brokerage account and let them “own a piece” of companies they know—think Disney, Apple, or even Roblox. It’s a powerful way to connect abstract concepts with everyday life.
You’ll also have opportunities to talk about risk, volatility, and why the stock market sometimes behaves like a moody teenager.
🎯 Pro Tip: Let them “pitch” an investment idea. If they want to invest in Nike because they love their sneakers, ask them why they think it’s a good choice. It’s a great intro to thinking like an investor.
3. Plan Ahead (A Budget Is Just a Superpower in Disguise)
To most kids, money is invisible—tap a phone, and presto, snacks appear. That’s why it’s important to peel back the curtain and show them the planning behind each purchase.
Instead of just talking about budgets, let them experience one. Want that $60 video game? Let’s figure out how many weeks of allowance it will take. Want a new bike? Let’s map out a savings plan—and maybe even a match-from-mom-and-dad incentive.
Better yet, bring them into family goals. Planning a trip to Disney? Show them how everyday choices (like eating at home instead of ordering pizza) free up funds for the big stuff.
📊 Fun Twist: Create a family “Dream Board” for shared savings goals. When they see progress, they’re more likely to stay motivated.
The Most Important Investment Is You
Your kids don’t need a finance degree—they just need your guidance. Every conversation about earning, spending, saving, and investing is a seed that grows over time.
So, whether you’re teaching a toddler to divide birthday money into jars or guiding a teen through their first paycheck, you’re shaping a lifelong relationship with money.
And if you ever feel stuck or unsure where to start, we’re just a phone call or email away. Financial literacy is one of the greatest gifts you can give—and the earlier you start, the better the results.
Schedule an introductory phone call at this link: Stewardship Advisors – Introductory Phone Call
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~Portions Adapted from ROL Advisor~
