Shaping Healthy Money Minds for Our Children

By Leah Jones on July 6, 2022

From the moment a child is born, parents worry over the many decisions they need to make for their child. The goal for that child is to eventually be an independent and contributing member of society. We stress over all these decisions that will lay this groundwork. Shockingly, as an investment professional for almost 20 years, and someone that has been fascinated with money since a young age, I am surprised when I talk about this topic with parents. When I ask other parents about how they educate their kids about money I see a lot of “deer in headlights” looks, followed by a comment along the lines of “we hadn’t really thought about that”.

I’ve been reading children’s books for 5 years now, coinciding with the age of my eldest son. I noted that not one of these children’s books addresses basic concepts of money. In fact, they seem to ignore the concept totally, or if money is involved, it appears out of thin air.  

When kids are young, they are the most impressionable. In fact, most research seems to indicate that the most formidable years of what goes on to shape children happens between the ages of 0 to 7. During this time, parents stress over schools their kids attend, food they eat, activities they do, are they meeting their milestones and every other thing you can imagine. Yet, in most cases, very little, to no time, is spent thinking about shaping their kid’s money mind or helping to develop and model healthy money habits.

In my opinion, being financially savvy is vital to shaping your child and helping them to be independent in the future. There are many challenges to laying this foundation.

First, parents themselves must model good money habits. Kids watch and learn everything from their parents; spoken and unspoken lessons happen daily. This is a challenge because many parents struggle with modeling good money habits themselves.

Money is literally fading into a series of electronic interactions, gone are the days of swapping paper money, collecting coins and keeping track of a ledger for checks. Now, money is exchanged via phones and credit cards, making it less tangible than ever. Kids rarely even see it, making the concept of explaining it, more important than ever.

Lastly, there is a general lack of resources around education of young children about money. It’s not a mainstream topic or concern. Sadly, even as kids become high school age, we still haven’t managed to create a mainstream basic finances course that is required.

We are doing a disservice to our children by waiting for them to get their first job and figure out the money thing on their own. I believe we can do better, but it requires a conscious and consistent effort. While I hate to put more on parents’ plate, I do have suggestions for raising a money savvy kid.

Recognize your own money behaviors – spending, savings, how you talk about money, how you explain money to your children. Are their financial tradeoffs or boundaries you set for your children? For example, you can get Elsa or Moana dolls but not both and explain why.  If you are lucky enough to go to Disneyland, explain to your kids, the trip itself is the treat which is an experience of a lifetime and that’s what’s important. If you recognize you are not modeling the best money behaviors, hire someone who can help you. If that’s out of the budget, talk to someone whose money habits you admire and ask them for tips. There are tons of blogs and podcasts on these topics to help you get started, if you don’t have a friend you can ask or prefer self-education.  

Make a point to have tangible money that your kids earn by doing chores. Make them responsible for it’s safe keeping. When they want something, tell them it must come from their savings. Have them count it out before they go to the store to buy something and pay for it themselves. Over the Holidays or birthdays when friends and family ask about gifts have a few of them give money and let your children add this to their piggy bank. I created a book titled, Kai Makes Money, which illustrates these concepts and is a great starting point for laying the foundation for a money savvy kid.   

I also created the company, Good Money Kids, as a resource for this collective goal of educating pre-school children about basic money concepts. Find other resources online, ask your schools to talk about money and talk about it yourself. These are efforts that can get you started on educating your kids about money. We must create more resources that can be used by parents to teach their children about money, starting at a young age. I am committed to this mission.

I believe we can and will do better for our children’s money minds.

(https://www.healthline.com/health/parenting/first-seven-years-of-childhood#In-the-first-years-of-life,-the-brain-rapidly-develops-its-mapping-system.).