More & more parents are choosing to teach their kids these 6 lessons in money!

Allowing & enabling kids to handle money responsibly from a young age, helps build positive money habits in the long term.

This can be done by practicing a few mindful daily behaviors that will foster a healthy relationship between your children & money early, which will then yield much better adult decisions as the stakes get higher. 

1. Set a good example

Kids watch & learn!

A study by the University of Cambridge reveals that money habits in children are formed by the time they’re 7 years old, especially since they first learn about the world through mere observation. If you’re a spendthrift who is slapping down money every time you are at the supermarket, they’ll definitely take note. If you share & care, they’ll notice that too & eventually try to replicate those behaviors.

Which means we are constantly being presented with opportunities to deliver good money lessons & set a healthy example for them to follow as they grow older

2. Help them learn about the concept of ‘opportunity cost’

Every ‘yes’ on spending can, & potentially will be followed by a - no! 

"If we spend all of our money at the toy store, we won't have enough for Friday Fudge." Help your children understand the power of decision making. It could be little things such as a choice between buying unhealthy treats in bulk or ‘saving’ up for a fun outing later. It is also important to consciously verbalize some of those decisions to help them understand that every purchase is a ‘trade-off’, essentially a choice based on your values, goals, needs, and desires, all of which have an opportunity cost.

3.  Nudge them to understand the ‘Needs vs Wants’ equation.

The financial freedom to spend on what we ‘need’ is better than a needless ‘want’ purchased! 

The ‘trade-off’ exercise may coax your children to decide, but they must also understand the whats, hows & whys of those money decisions. As mindful parents we must learn to say ‘no’ to those impulse demands despite any tantrum! Surely you can reward them later with a pair of shoes they badly need or those dance lessons that they yearn for. This will demonstrate that you are intentional with your spending, reflecting that while it is not a bottomless pocket, you get to make spending decisions about what's most important. Teaching children to avoid instant gratification at an early age is crucial and will help them avoid unhealthy spending or impulse shopping on their credit cards when they turn into young adults.

4.  Introduce an ‘allowance program’

“Money does not just come from mom and dad’s wallet,” says Rachel Cruze, personal finance expert. 

Co-author of “Smart Money Smart Kids: Raising the Next Generation to Win with Money.”, she says “When you’re teaching your kids about money, it’s important to teach them where it comes from.” While the subject of ‘allowance’ or ‘pocket money’ remains divisive for parents when it comes to their kids, it's important for children to learn early that it takes work to make money. Allowing kids to interact with small sums of money on their own also helps them to take ownership of their spending & the opportunity to fail. Failing young with tiny sums of money can potentially help them learn lessons that formal education usually cannot teach, paving the way for mindful spending habits as adults.

5.  Mindful Board games

‘Playing gives children a chance to practice what they are learning’. 

Board games can play an important role in developing financial awareness in children early on. Board games such as PayDay, Monopoly, The Game of Life can teach players how to manage monthly income and expenditure, including how to handle loan payments, cash windfalls, and other budgeting basics. These physical interactions and transactions can help kids learn how to handle money tangibly whilst teaching them healthy money strategies within a safe environment. 

6.  Converse with them about the 3 S’s of handling money!

Verbalising the three S’s of handling money, vis-a-vis, ‘Saving, Spending & Sharing’, help a child remember ‘what we do with our money.’ more effectively. 
It is essential to teach kids to be a good steward of their resources, by simplifying the complexity of money management. The three S’s can be in any order.


You can begin by helping them select a goal to save for, could be large or small but preferably something that is achievable within a month and leads to a rewarding outcome. This will help to associate saving with a positive emotion, potentially establishing a fruitful approach towards saving, even as an adult.


It would be interesting to note that not all kids enjoy spending. Some kids get anxious at the thought of parting with their birthday bounty or allowances. It’s important for kids to have a good grasp on how spending works in order to manage money effectively in adulthood. You can start with a fairly standard 50/20/30 budget which is spending 50% of the income on needs, 20% on savings, and 30% on wants. A good exercise for your child is to track how much money they spend in a week or (for older kids) in a month to get a hold of their spending habits


‘Money is meant to be shared.’

It's extremely important to teach your kids the value of ‘sharing’. Giving can be a powerful feeling that can help to inculcate feelings of gratitude, along with learning to deal with loss peacefully. You can start with nudging your kids to donate toys & clothes they no longer use. Also teach them to ‘tip’ in restaurants as they learn about gratitude and humility. Take the opportunity on festivals such as Eid, Diwali or Christmas to help them understand the concept of sharing and giving. Their own birthdays are a wonderful time to introduce the ‘10% ritual’ of giving a part of your earnings to the needy. Kids can learn to multiply their joy in adulthood, by learning the essence of sharing and caring early.