Teaching our kids about the importance and management of money at an early age is a key component of avoiding financial problems later down the road. The road to financial success only gets more complicated as we grow older. However, if we can help youth develop the right financial skills, literacy, and a saving mindset earlier in their lives, they will have the necessary know-how and confidence to overcome what financial problems that life may throw at them.


Money Does Not Grow on Trees


The saying “money does not grow on trees” is truly a piece of wisdom that is a foundational building block of financial education that all youth should understand as early as possible. In cases of money matters, ignorance is not bliss and what you don’t know or understand can hurt you. Youth need to understand that money does not just magically appear in mom or dad’s wallet. Instead, parents need to consistently show the relationship between work and money. The lesson that parents need to showcase to their kids is a “no work gives you no money” mindset. 

For example, if your child already does chores, try incentivizing your child by providing extra chores in return for a bit of money and then help them to decide what to do with the money earned. An important item to note is that parents should not try to tie money and chores that they normally do together. Ensure that you are giving a monetary award for extra work on top of what they normally do. This prevents youth from neglecting regular household chores once they get a part-time job in their later teen years.

It’s also important to not simply give an allowance for just “fun stuff”. We want our children to understand that it’s okay to spend on the things they want occasionally. However, it’s significantly more important that they cover their expenses, and savings goals beforehand. Consider giving a little bit of extra allowance if your child is meeting their savings goals consistently. As a bonus, this serves as an extra lesson about compound interest!

The Dollar Detectives have great workshops for helping youth better understand and navigate the financial world!

Don’t Overcomplicate Things


When trying to decide what would work best for teaching your child, there are thousands of resources available. Parents are flooded with so many tips about investing, various complex investment vehicles, timing of teaching their kids, etc. It can be really overwhelming, and parents find themselves stranded on what they can or should teach first. However, just block all of that noise and bring your focus back on the basics.

For instance, a great activity for showing money management is to have three physical piggy banks for the kids. Each piggy bank represents spendings, savings, and giving. Every time your child gets allowance money, encourage them to split up their allowance between the three piggy banks. These piggy banks not only allow for your child to get hands-on experience with managing money, but it also creates room for financial conversations to be had when your child becomes uncertain of where to put their money. Another alternative to using piggy banks is to use clear jars. Like the piggy bank in method but the clear jar can physically show how much money is in each jar at any given time.

A more passive but simple way to teach your child some financial basics is to let your child see how you use your money. In other words, let them see how you pay your bills and how much those bills usually are. If you pay your bills online, let your son/daughter watch as you pay. Another way of displaying money management is to use cash to pay for their groceries and show the receipt to your child. Also consider letting your child in on family budget talks. Combine these activities and repeat them over and over again. Soon enough, your child will adopt this as a habit and have a much better understanding of responsible money management.

Money Growth and Financial Behaviours 


Aside from teaching youth the importance of money and the basics of how it works. It’s just as equally important to know how to make money work for you. The more complicated items such as investing in the stock market can be difficult to teach. Some children pick it up faster than others but that is okay! However, before kids become adults, parents should consider opening a custodial investment account. These types of accounts are a way for parents to control their child’s investments without the child being able to access it themselves. You could call it training wheels for early investors! This is a great way to demonstrate compounding interest, dividends, etc. Also, as an added bonus, parents can save up for their child’s post-secondary education much faster. 

We should try to model good financial behaviours for our youth. Parents should always show their kids how they themselves save and spend money. Being a good financial role model is a great way for a child to pick up on the importance of financial security and money management. 

Oftentimes, parents overlook the value that the act of giving brings as a part of their child’s financial education. Having your child understand that giving to others who are less fortunate explains that while money is important, it’s okay to give to those who need it if it doesn’t put you in a bad financial situation.



Financial education at an early age plays such a critical role in developing good habits of saving and spending responsibly. It’s also important to note that this learning process continues even as adults. However, like anything in life, it’s so important that we start early and with small steps to ensure that we can create a solid financial foundation to stand on, so that our youth can prepare for a better financial tomorrow! 


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