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Return Published: 7 September 2022

How do you teach children good financial habits?

Parents play a key role in their children’s financial education.  By introducing them to financial concepts from a young age, and continuing to do so regularly throughout their childhood, you can help your kids become confident, financially advised adults who are less likely to get into debt or experience difficulties when it comes to their personal finances.

But how do you turn your kids into savvy shoppers, diligent budgeters and sensible savers? Here are our tips:

Talking about money

Down with the taboos!

Money and finances are subjects we often avoid discussing openly. However, the first step to introducing your children to money management is to talk about it. Don’t forget to adjust the concepts and vocabulary according to their age!

It can be as simple as comparing products at the store and explaining why you are choosing this one over that one. You could also demonstrate the difference between wants and needs by explaining why you don’t buy a certain item even though you would like to.

Without going into detail about the cost of rent, groceries, etc., you can also explain that working allows you to provide for the family’s basic needs as well as the occasional treats.

Another good exercise is to pretend play shop at home or let them occasionally pay cash for you at the register. Also, don’t be afraid to tell them about the money you’re saving for long-term projects or your emergency fund.

By discussing money, expenses and savings with them on a regular basis, they will gradually integrate knowledge that will be useful for the rest of their lives.

Setting a good example

As the saying goes, actions speak louder than words. It means just talking about good financial habits isn’t enough to pass them on to your children. You need to set a good example by adopting those habits yourself!

If your children see you making impulse purchases on a regular basis, they may be tempted to do the same once they earn a pay cheque themselves. On the other hand, if they see you making thoughtful purchases and saving money, you’ll help them develop better discipline and responsible behaviours.

Giving an allowance, yes or no?

To give children the opportunity to learn how to manage their own money, giving them pocket money is a recommended practice. It is an opportunity for them to build a solid foundation before they receive a real salary. The earlier an individual begins to manage their own money (ideally in childhood), the sooner they can learn from their mistakes, at a time when their mistakes do not have serious consequences.

A small allowance – as little as a dollar per week – can be offered as early as age 5, according to some experts. But it’s up to you as a parent to determine when your children have the maturity and knowledge to start receiving money.

Should children have to work to earn their allowance?

An allowance does not have to be related to a task! Some parents choose to offer it without asking for anything in return, because their only goal is to help their children learn about personal finances.

No matter what decision you make, it is important to explain the reasons behind it: “I’m giving you an allowance every week without requiring you to do a chore in exchange, because I believe that in a family, chores are a group effort in which everyone should contribute,” or, “I’m giving you an allowance in exchange for you doing this chore because I believe that you should learn that you have to work to earn money”.

All conditions surrounding the allowance must be clear and respected at all times by both parties. For example, just because your children misbehave does not mean that the allowance can be withdrawn.

Also, know that giving money for good grades is not recommended!


To help your children plan their budget and anticipate their expenses, be consistent, give them their allowance on the same day each week.

Creating the habit of saving

Having a lot of money (or even a savings account) is not necessary to start learning how to save! If you choose to give your children an allowance, you could invite them to save some of it for a special project they have or a larger purchase they want to make. In other words, encourage them to set savings goals and put a plan to achieve them in place.

Occasionally check in with them on their progress. Calculate how much they have left to save, or how long it will take them to reach their goal if they continue at this pace. Help them estimate what would happen if they saved a larger amount each week. Make it fun and informative to keep them motivated.

The earlier a child learns to save, the greater the payoff as an adult! Learning to save also teaches discipline and delayed gratification.

Monitoring their purchases and expenses

When your children want to make a purchase, discuss it with them. Is it a need or a desire? Is it of good quality? Is it reasonably priced? Are there better alternatives on the market?

At the end of each month, sit down with your children and discuss their purchases. Are they proud of it? Do they think it was a good purchase? Do they have any regrets? Why or why not? If they made mistakes, that’s okay! They are still learning. Instead, make sure that this mistake can be constructive so it becomes an educational experience.

Also, calculate how much they’ve spent. This exercise can help them spend more wisely in the future.

In conclusion, teaching good financial habits and the value of money to children requires some discipline from the parents as well. But it’s a rewarding exercise for little ones who will benefit from it throughout their lives.

And remember, the financial future belongs to those who learn early!