Four Reasons Why You Should Already Be Teaching Your Kids About Financial Literacy

Editorial Team

By Leif Kristjansen

Why is it worth teaching your kids about financial literacy before they graduate high school? Honestly, the answer is a bit selfish. Teaching your kids smart money moves today means you won’t be footing the bill for their new iPhones for the rest of your life!

Humor aside, there is a very real, lasting value to creating penny-wise preschoolers because all of us have to interact with money in order to exist in society. Neglecting financial literacy is like sending your kids out as sheep in a landscape filled with easy credit, tempting impulse buys and other “wolves.”

I want to cover the four reasons why giving your kids a head start on finance lessons is the key to creating little people who know how to grow and hold on to big wealth.

I’m also going to reveal the surprising question too many parents aren’t asking their kids about money!

Reason #1: They Can Make Their Money Mistakes in a Safe Place

There are bound to be bumps on the road to financial literacy. That’s why starting the lessons while the stakes are low instead of waiting until the wrong move translates to a dented credit score is everything. You’ll be shocked by what I’m about to say.

You should celebrate when your kids fail with money!

Giving your kids a chance to “fail” with money in a low-stakes way allows them to learn from money mistakes by having hard lessons embedded in their brains. This is why I like techniques like allowing kids to create budgets and experiment with investing.

No amount of lectures from Warren Buffet can show kids the cold, hard reality of money like the pain of blowing their savings on a must-have gadget that doesn’t live up to the hype or watching their cash evaporate after a rocky day in the markets.

Reason #2: They Learn That Time Really Is Money

It’s not until we actually get in the grind to earn an hourly rate for the first time that we understand why the “hourly” mentality isn’t going to get us to big places.

Most people don’t learn this lesson until they are adults who are already stuck in the system. However, you can give your kids a good 10-year to 15-year head start on this big realization by paying them for chores early on in life. You might even turn them into a stock market mogul in their early 20s!

Showing kids the time-money relationship is a great way to raise money-minded thinkers who are interested in finding ways to “hack” the system by unlocking routes to passive income.

Reason #3: They Will Understand Why You Tell Them “No”

Have you been accused of being a “mean” parent because you didn’t pony up the money for some absurdly priced phone or piece of clothing? Many kids carry unrealistic expectations about what their parents can afford because they don’t have real relationships with money.

Kids who are taught how to budget gain an appreciation for all of the costs their parents have to manage. I recommend developing a healthier mindset for not getting caught up in the drama when your kids want to butt heads about the gear, goodies and gadgets they feel they’re entitled to receive.

Reason #4: They Won’t Carry Around Toxic Money Shame

You won’t believe the number of people I counsel on financial issues who have deep-seated shame, fear and anxiety over money. It’s all because nobody ever had healthy, positive conversations about money with them while they were growing up.

Money is not something to whisper about! Yes, it’s possible to help your kids become excited about money without raising greedy, money-obsessed people. Kids need to be able to ask questions about how money works without fear!

Start “Money Camp” Today!

I don’t care if you have kids in diapers or teens heading to college! It’s never too early or late to start important money lessons. I mean it when I say it’s simple to get the process going. When talking to parents about financial literacy, I am often shocked that they haven’t even touched on the most basic points about money with their kids.

“Where do you think money comes from?”

Just start with this simple question. Your mind may be blown when you get the answer if you’ve never talked with your kids about money before. Once you know where your kids think money comes from, you can help them to get a better understanding of how to manage it!

Here’s my final thought on the matter…

You can’t preach what you don’t practice. Having your own positive relationship with money allows you to lead by example.

If you’re floundering a bit when it comes to sticking to a solid financial plan, I recommend getting on a good parent-friendly money regiment that will help you reach your own financial dreams. Being smart with money can be a family affair!


Leif Kristjansen is the co-founder of where he and his wife write about finances and early retirement for busy people. In their early 30s, they even retired from their corporate 9-5 and want to teach you how you can do the same. They have kids and a house in a high cost of living city but managed to succeed via saving skills and rental houses.

Twitter: @5yearFIREescape


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