Teaching Money Lessons to Kids Who Don’t Have it As Tough as You Did

The following is a guest post from Rebecca Walser, a licensed tax attorney and certified financial planner who specializes in working with high net worth individuals, families and businesses at Walser Wealth.

The hardest thing about upward mobility – the so-called American dream – is attaining it.

Perhaps the second hardest thing is this: Once you’ve risen from a hardscrabble upbringing and gained financial success, how do you pass the traits that helped get you there – hard work, accountability, passion and discipline – on to your children?

The natural inclination is to give them all the things you never had – and to shield them from the worries you experienced growing up. But that won’t help them long-term.

You can’t duplicate your humble beginnings for them, but you can teach your kids the skills they’ll need when they’re making their own way in the world.

One of the earliest memories is of being 4 years old and flipping a light switch at home, only to have nothing happen. That’s when I learned about money and bills, and that if you don’t pay the electric bill, the lights won’t come on.

The Walser children – ages 9, 7 and 4 – haven’t experienced anything quite like that, but I still want them to understand money. One way to accomplish that is they get weekly allowances to cover their expenses, and they must budget everything for themselves.

When we set a limit, we set a limit. Mom and Dad aren’t going to bail them out if they are a quarter short on a toy they want.

Teaching Tips

Here are some other tips Walser has for helping fortunate kids understand finances.

  • Experiment with delayed gratification. Remember the old Stanford University “marshmallow experiments” from the 1960s and ‘70s? A child was offered a choice between one small but immediate reward (usually a marshmallow) or two rewards if he or she could wait until the tester came back after about 15 minutes. In follow-up studies, the researchers found those who could wait longer tended to have better life outcomes, as measured by SAT scores, body mass index and educational success.
  • Don’t keep the kids in the dark. Children often are unaware of all the unseen expenses that go into running a household. Make sure they know there’s a cost for electricity, water, cable and home maintenance.
  • Needs vs. wants. How often have you heard your child say, “But I need those jeans!” There’s a big difference between wanting a designer label and needing new pants. Tell your teen you’ll give her a reasonable amount of money to buy the jeans – but if she requires more for what she wants, it’s on her. It’s amazing how quickly kids change their mind about needing something when they’re paying for it.
  • Work it out. Your children may not need or want to work, but a job can teach a lot about having a solid work ethic, the importance of getting a good education and competition in the marketplace. Volunteering can have similar benefits.

Parents want to give their children every advantage and that’s just what you’re doing if you prepare them to better deal with real-world financial decisions.

A little tough love now will go a long way towards preventing an unwelcome sense of entitlement from your kids and keeping them out from under a cloud of debt when they’re older.

Final Thoughts

Finding the right balance, when you do have something to give, is the key to providing a more comfortable life for your children without quenching that inner drive that we all are born with to make something of ourselves – something that cannot just be handed to you.

Blogger-in-Chief here at RetirementSavvy and author of Sin City Greed, Cream City Hustle and RENDEZVOUS WITH RETIREMENT: A Guide to Getting Fiscally Fit.


  1. Delayed gratification is an important concept (which sadly, many adults have trouble with). It also ties in with entitlement. Like Brian, I think it’s important that children learn it takes work and effort to earn money.

    • Indeed. We’ve become a nation of hyper-consumers and the inability to delay gratification – which often manifests itself as credit card debt – is a killer. The sooner children learn to delay gratification and the impacts of debt, the better off they will be.

  2. Children are resilient. They can handle being said no to. We found it’s important to explain why were saying it. Show them the electric bill so they understand the importance of turning off lights, and electronics when not in use. Included them in money discussions. Do they understand how long you have to work to pay for a new smart phone or it’s monthly bill? Just think of the head start kids will have when learning and discussing money from a young age.

    • Great points, my friend. Thanks for stopping by and sharing your thoughts.

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