10 Lessons to Teach Your Kids About Money & why its so important

Teaching kids about money is a controversial thing — no one argues that you should teach them, but the how is a tougher question. I recently got a mail from one reader & that really disturbed me. Go through the below mail & realise the importance of teaching kids about money……

“How do I convince my sons who believe that there is nothing wrong in enjoying on credit facility or enjoying more than what we earn today (my elder son says that his next hike can clear the present debt).

Whether right or wrong my sons had education from good school/colleges where majority were effluent and strikingly rich where as we belong to middle or lower middle class. My husband stretched himself, rather went out of the way taking debts for their education with a belief that it is a good investment. Yes my elder one is from xyz (Indian top engineering institute) and younger son is in 3rd year abc(well know engineering institute from south). As my husband expected, one of the sons did get a better job than many of his cousins/friends. But what about his education loan and his spending habits?

The sad part I observed is, their peers/friends are from rich clan and for them many luxuries are necessities to maintain their “class”. My sons being in their company/friendship/continuing them as friends, also got almost similar attitude and are unable to adjust to our “class”. As a result their expenditure is more than our “class” . My elder son who earns nearly 38,000 spends more than 20,000; whereas my nephew who earns just 30,000 spends only 10 to 12 thousands and able to save more.

I am not able to make my sons understand that how much one saves is more important than how much one earns.”

Definitely there are solutions to this situation but still prevention is always better than cure. Go ahead & prepare your kids for wild financial world.

Four Guiding Principles:

  1. Educate yourself. You can’t teach something you don’t know about yourself. Learn as much as possible about budgeting, about saving, about investing, about cutting expenses, about reducing debt. Armed with knowledge, you’ll be a good teacher.
  2. Set a good example yourself. It’s one thing to tell your kids something, but if you are doing the complete opposite, they’ll learn more from your actions than your words. To teach them about controlling spending, you have to do so yourself. Lead by example.
  3. Teach them one habit at a time. Your kids are not going to become skilled financial planners overnight, or in one month, or even in a year. Your goal should be to teach them these lessons over the course of their childhood and adolescence. So teach one thing at a time, until they’ve learned the skill, and then move on to the next. There’s no rush.
  4. Let them learn by doing. You can’t teach by telling. You have to tell (briefly), then show, then let them do. Let them make mistakes. And then talk about those mistakes. Soon enough, they’ll learn why those mistakes were actually mistakes, and if you set it up right, they’ll learn better habits on their own, by doing.

So with those principles to guide you, here are 10 valuable lessons you can teach your kids about money.

Lessons to Teach Your Kids About Money

This article is from ZenHabits (uncopyrighted) one of the top blogs in world. This is run by Leo Babauta – he writes on simplicity, health, goals, motivation & inspiration.

Do you feel you got an adequate financial education growing up? Are you making any conscious effort to teach your kids about money?

Lessons to Teach Your Kids About Money


  1. I think if we get our kids (college going) to do part-time work during their holidays or even during their college/university, they will realize the value of money, realize how easy or difficult its to earn something!

    • Hi Shiv,
      This is an awesome idea – this way they will definitely learn the value of money.

      • Hi Hemant,
        thanks for all the informative articles.
        Want to know how to escalate when there is poor reply from TATAAIA customer service. When I asked they are not providing. Sad to say they are not helping in paying the premiums.
        Have found the solution now – but want their top management to know the bad service they are giving.

    • Hi Sagar,
      Thanks for sharing this link here – sometime back I shared this in TFL newsletter.

  2. Dear Mr.Hemant,
    Greetings. Very good posting for both. Reminder for parents and lesson for kids. Thanks.

    • Hi Sekar,
      Absolutely – if parents will not follow the rules how they will inspire their kids.

  3. Dear Hemant,

    Great article. What if we have been conveyed in our
    childhood, something would have been changed.
    But better late than never.
    For our kids, very good lesson.
    Keep it up bro


  4. Hi Hemant,
    The article is simply AWESOME.
    My mom was very good at saving money and we have learnt a lot on this subject from her.
    But as a daughter and now as a mother, I have experienced that only one parent can not sow this seed of financial learning in the child. You have very rightly mentioned that both the parents should first set an example and then teach their children.
    Its seen often that many parents are of the opinion that there child is too young to understand financial matters, and that we must not put such pressure on them. They will learn on their own.
    I would like to share what my mom did. She gave us piggy banks and inspired us to put all the money which we had into this piggy. Once in a year, after our exam results, she used to buy us new clothes out of those savings. As a child it was a moment of pride for us to wear clothes out of our own savings.

  5. Well…parents should be preaching what they practice. And the nuance is to practice in the presence and knowledge of kids. Kids are keen observers of whatever interests them. Well…and once they observe it becomes less difficult to explain things to them…excellent article…i thought the parent’s role was splendidly highlighted…

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