4 Easy and Practical Ways to Raise Money-Smart Kids_picture of Black family at table with piggy bank and money

4 Easy and Practical Ways to Raise Money-Smart Kids

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The following is a guest article written by Kalen Bruce of “Freedom Sprout.” Enjoy!

Schools really don’t teach our kids much about finances. There are plenty of things not taught in schools that we have to take responsibility for as parents…and sadly, money is one of them.

Fortunately, there are ways to raise money-smart kids, even if you don’t feel qualified to teach them.

There are practical things you can teach as well as plenty of fun ways to teach your kids about money. But remember, while the things you say are extremely important, your kids will be watching what you do, regardless of what you say.

“More is caught than taught.”

– Rachel Cruze

In short, if you’re practicing smart money habits, your kids will naturally take up those habits. Unfortunately, the opposite is also true.

Don’t stress though. Here are some practical ways to instill positive money habits in your kids.

1. Find Teachable Moments

Teachable moments are great for your kids, but you’ll also find yourself learning from these. When you realize your kids are paying attention to everything you do, you may think twice about some of your money habits. I know it’s helped me to think twice.

When you go shopping, or when you eat out, you can show your kids how you are being smart with money. When you see them watching, you’ll also likely make smarter purchases.

Teachable moments are scattered throughout each day. Often, we get so caught up in our routines and processes, we don’t even think to teach our kids basic skills. Believe it or not, your kids may not know how to go into a store and make a purchase if you’ve never shown them how to do it.

Every time the opportunity comes up to show your kids how something works or how to do something, use it as a life lesson. When you’re at the bank, show them how to open an account. Let them make a deposit. Even if you’re doing a digital deposit, show them how it works.

Kids will automatically think you are a magic-money machine if you don’t show them where money comes from. We need to teach our kids money comes from work. Sure, there are other ways to get money, but that’s the usual way. It doesn’t just come to us because we exist.

Sometimes it’s hard to find these teachable moments because we don’t realize what we know.

The Curse of Knowledge

When it comes to teaching our kids about money, and life in general, we have to go back to the basics. We have to beware of “the curse of knowledge.”

Elizabeth Newton, a Stanford University graduate, illustrated the curse of knowledge. Chip and Dan Heath expound upon the concept in their books.

It comes down to this: When you’ve done something a thousand times, it becomes second nature. For example, if you’ve studied a certain topic, you don’t realize how much you know compared to someone who hasn’t studied at your level.

Healthy financial habits work the same way. If you budget, plan [and stick to] shopping lists, shop the clearance rack, and conserve electricity around your home, it becomes natural. These are the types of healthy money habits our kids need, but often don’t understand. We’ve been doing it so long, we barely realize we do it.

I remember this happening to me when I was teaching a finance class. I started off, “This mutual fund is different from this one, because it includes international stocks.” A student stopped me and said, “Wait… what’s a mutual fund?” I didn’t realize how basic I should’ve started that class, but it was eye opening to me for my children’s sake to realize I had been assuming they knew things I hadn’t taught them yet.

We must take this into account and start on their level: basic and introductory.

You may be thinking you’re not money-smart or you don’t have a lot of healthy money habits. Again, don’t worry! There are places for you to turn.

2. Use Your Resources

Online resources make it easy to teach your kids about money.

If you’re not good with money (yet), think about how you’ve learned anything else in life. When you dive into a new venture, you read books, find YouTube videos, take classes, and a number of other things.

You’re reading this article right now for that exact reason.

The kids finance world is limited. I started Freedom Sprout to fix that problem, but there are still all kinds of resources available.

Here are just a few of them:

  • Biz Kids – They have videos, lesson plans, and games about money.
  • Consumer Financial Protection Bureau – A resource to help parents teach their children about finances.
  • Mini Money Management – With the goal of raising a financially literate generation, this is a chore system that lets your kids spend like they’re already on their own (including paying rent).

That’s just the start. A quick Google or YouTube search will help you teach your kids about any money topic you could imagine.

There are also ways to teach your kids offline.

3. Play Money Games

I created a list of 53 finance board games that teach your kids money concepts.

Here are some of the best:

  • Cashflow for Kids – My kids love this game, and you can find it pretty cheap if you buy used (we paid $2 at a flea market). It teaches how to acquire assets over liabilities, and it’s easy to understand. Most kids 4 and up can play this one.
  • CashCrunch Junior – This game teaches positive money habits. Recommended for children 5-12 years old and it’s less than $30.
  • On the Go – This is a free, printable game that teaches kids the value of money, counting it, and making change.

A company out of Singapore, Capital Gains Studio, just reached out to me to test some of their children’s finance games. They have a bunch of games that directly teach financial concepts, to include debt, investing, and even cryptocurrency.

Almost everyone learns better by doing than merely by reading and taking classes. For this reason, games are a fun way to instill some healthy money habits.

4. Teach the Basics

These are 7 basic concepts your kids should know and understand before leaving home:

  1. How to start, edit, and manage a budget – Budgets aren’t created overnight. Sometimes it takes months to get them right and they are never going to be 100%. If kids don’t realize budgeting is an ongoing process, they’ll give up at the first hiccup. Let them see your budget. Withholding your finances from your kids can leave them in the dark, but if you let them see how your spending adds up, they’ll be prepared to budget when they move out. If you’re doing well financially, show them your success. If you’re not, show them your mistakes so they don’t make the same ones.
  2. How to open and manage accounts – From a checking account to a brokerage account, show them how they all work. With online banking, it’s super easy to give them an overview. When they start building their own accounts, remind them they can turn to you with questions along the way.
  3. The power of compound interest – Show them how compound interest works. Let them calculate it themselves with a simple 10-year example of how much they would have if they start with $1,000 and receive 5% interest (compounded annually).
  4. The power of automation – In today’s tech world, you can automate everything. Your investing, savings goals, giving…even your budget and debt reduction. Automation is a powerful tool. If your kids automate the important bills and financial goals, all they have to do is live on the money left over.
  5. The importance of emergency reserves – With COVID-19, everyone has realized the importance of an emergency fund. When your kids leave for college, it’s a good idea for them to have at least $500 in emergency savings. If they skip college and go straight into the work force, they’ll need more.
  6. The ins and outs of insurance – We insure the things we can’t afford to replace. That includes our home and car, but it also includes our health and our life. It’s vital your kids understand the importance of insurance, how it all works, the insurance scams, and how to purchases what they need.
  7. The dangers of debt – Get online and find some horror stories of families who lost everything due to debt. These stories aren’t hard to find, sadly. Your kids should have a healthy fear, or at least a deep understanding, of how dangerous debt can be.

You could also go into how credit scores work, but personally, my wife and I believe we can raise debt-free kids if they learn this stuff at a young age.

You Can Raise Money-Smart Kids

It’s become my catch phrase to say, “If we teach kids how to manage their money when they’re young, we won’t be showing them how to dig their way out of debt later.”


We can raise financially savvy kids who won’t make the same mistakes we’ve made in our adult lives. It’s easy when they start young. It’s much harder when they have to learn this stuff after they’re already deep in debt.

You have the resources. You’re gaining the knowledge. Let’s raise money-smart kids.

4 Easy and Practical Ways to Raise Money-Smart Kids Pin - picture of Black family at table with piggy bank and money

Which ideas do you agree with and disagree with? How do you teach your kids about money?

Kalen Bruce is a financial coach, author, U.S. airman, and father of five. As the founder of Freedom Sprout, he has a mission to raise a generation of financially literate children who live intentionally. He holds a BA in Finance and has been writing in the finance world since 2013. He lives in the foothills of the Italian Alps with his family.

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