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The Secret of Teaching Financial Literacy to Kids

Personal Finance
3 kids learning to make something with glue in a classroom

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Do you want to raise a million dollar kid?

Do you currently teach financial literacy to your kids?

I had to bake six dozen cookies for the annual Airman Cookie Drive and at the time, my youngest two, Jonathan and Joshua were toddlers.

I decided to let them “help” me so I put on their aprons, washed their chubby hands and sat them on a stool so they could reach the countertop.

Their “job” was to take the balls of sugar cookie dough and toss them in a gallon-sized bag of cinnamon sugar in order to make Snickerdoodles.

Then they took the balls out of the bag and put them on a special place on the counter. They loved to “help” mama even though most of the sugar ended up on the counter and floor.

This simple activity also paved the way for a good work ethic in their future—one that will help them earn a living for their families one day.

My philosophy is that we should teach our children to help while they’re young so they will be of genuine help when they’re older.

As teenagers both boys knew how to create a pan of brownies, mix and frost a cake, make their own sandwiches for lunch and cook a three-course meal.

Their older brothers and sister had the same work ethic that helped them learn diligence and earned them full ride scholarships.

We have three children who have garnered college scholarships totaling one million dollars in cumulative value and the rest of our kids are also graduating with no student loan debt from college.

This all started when they were toddlers helping mom cook and learning financial literacy by developing a good work ethic.

Work Ethic

Your child will have daily chores they need to perform for no pay whatsoever.

This is the foundation of a good work ethic that will help them throughout life. The work also needs to be age appropriate.

Younger Children

– Even a three-year-old child can help set a table, carry dishes to the sink, & pick up their toys and clothes.

By the time they’re six, they can make their bed with help & put away clean clothes. Praise them frequently.


– Children between the ages of seven and twelve are beginning to learn how to clean their rooms by themselves, vacuum, dust, take out the trash, clean dishes, unload the dishwasher, sweep, and rake leaves.

Thank them frequently.


– Teenagers should know how to do everything we’ve mentioned so far without supervision and on time.

They should also know how to work for others, participate in volunteer work and eventually get a part time job outside the home.

Their teachers and employers will praise and thank YOU for your child’s great work ethic!


An allowance is a wonderful teaching tool. Here are some ideas:

Safe Haven

– When kids learn about money while they’re still at home, they have the freedom to fail in a safe haven. If they fail, their parents are there to help train them. A good age to start an allowance is around seven years old, depending upon the child’s maturity.

Same Old, Same Old

– It’s important pay the allowance in the same amount on the same day of the week. This gives them something to count on and allows them to budget their needs (and wants) accordingly.

Share, Save & Spend

–Parents help kids learn to share (or tithe) 10% of their allowance to their local church or non-profit organization, save at least 10%, and spend the rest wisely.

Kid’s Budgets

These can be fun! You set and pay the budget—but your child keeps the money they don’t spend.


– While eating out, set a fair amount for your child to spend on his meal. He may choose to drink water or eat dessert at home in order to come in under budget & keep the extra money!

Fun Days

– The next time you go to the movies, zoo or a theme park, set a budget for your child. When the funds run out—it’s gone.

Help them find coupons and discounts to save money. They will learn how quickly money can be spent if they are not careful.

Financial Report Card

The following areas are very specific things that your kids can learn at specific ages.

As you review this list, I think you’ll see daily habits that are already a part of your family’s way of doing business.

You may also find new ideas of skills that can be introduced into your plan to teach them financial fitness.

Age 2 to 4

  • Picks up toys cheerfully
  • Is on a schedule for sleep, play, and work (or school)

Age 4 to 6

  • Makes bed in a basic way (not necessarily neat)
  • Picks up room regularly
  • Brings clothes to hamper
  • Knows how to set and clear the table
  • Knows how to take out the trash

Ages 7 to 10

  • Knows how to sort laundry into whites, coloreds and darks
  • Can fold laundry and put it in everyone’s room
  • Is given an allowance
  • Has a savings account at home and at a bank
  • Manages a fun kid budget (restaurant, zoo, amusement park, etc)

Ages 11 to 12

  • Begins to do additional “jobs” for hire within the home and occasionally for friends or family.
  • Has a savings account with at least $200 to $250 in it.
  • Is learning the meaning of delayed gratification
  • Can save up for half of a larger ticket item they want (bike, skates, video game, etc)
  • Is regularly contributing to a community organization either through volunteer hours or donating goods (clothing, toys, money)

Ages 13 to 15

  • Can manage and balance their own checkbook with supervision
  • Has enough in savings to take out $200 to $300 to start a mutual fund
  • Is able to do outside jobs for hire among approved “employers” in the neighborhood
  • Regularly pays for non-family outings (movies, theme parks, etc)
  • Is saving for a vehicle
  • Is aware of the fact their grades in high school will impact their ability to get into college and earn scholarships for college

Age 16 to 20

  • Can balance a checkbook without supervision
  • Has an additional credit card (on parents account) and can use it responsibly
  • Can manage and balance a clothing budget and personal financial budget
  • Regularly works inside and outside of the home during breaks from school
  • Has paid for 1/3 to 1/2 of the cost of their car
  • Maintains a good GPA (or what they are capable of)
  • Has a regular volunteer position (hospital, coaching, church involvement, etc)
  • Can use social media to learn ways to save money

Keep in mind that even though it “costs” you now, in terms of time, energy and attention, it can pay huge dividends later when they are earning their own way and know the value of a buck.

Do your children receive an allowance when doing household chores?

Photo credit: Môsieur J. [version 8.0] via photopin cc

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