Kids naturally learn to say “I want” by pointing at things they like, but grasping the value of money and where it comes from is something they need to be taught.
It’s never too early to introduce financial literacy, and many kids start forming their financial habits by age 7. (1) While my kids aren’t quite there yet, I have already started introducing good money habits to them. They may not be able to grasp the difference between pre-tax and post-tax contributions to retirement accounts, but they are starting to understand the importance of saving for the things they want and the value of earning a dollar.
Here are three important money topics I’m teaching my kids that work for any age.
1. Saving, Spending, and Sharing
The old maxim “save half, spend half” taught kids how to classify and allot their money. When they received their allowances, children would put half of the money aside for savings and spend the other half on something to enjoy now.
As a rule of thumb, “save half, spend half” is still effective and appropriate. Another strategy I like divides the approach into three areas: saving, spending, and sharing.
In this scenario, your child sets aside one-third of their earnings for savings, keeps another third for things they want now, and uses the remaining third to help others through charity or other ways. This approach develops a healthy balance between what they want, what they need, and how they can help others.
2. Explain Saving, Investing, and Borrowing
When your kids get older, you might have the chance to talk about deeper financial subjects that help them prepare for adulthood. But for now, it doesn’t have to be complicated.
To explain banking, consider opening a bank account in your child’s name. When they want to buy something, they need to go to the bank and withdraw cash. If they want to keep a certain amount of money in their account, explain how interest affects their balance.
Discuss investing at a rudimentary level too. You could say that Apple, the company that makes their iPad, sells small shares of their business that anyone can purchase. Explain that if they buy a share of Apple, their money could potentially increase along with the company’s growth.
As for borrowing, discussing all forms of borrowing could be overkill. But it might be smart to at least discuss damaging debt, such as credit card debt. Clearly, a large number of Americans suffer from credit card debt, as the country’s current credit card debt stands at $925 billion (2) (slightly below the record high).
3. The Value of Earning a Dollar vs. Being Given One
When you take the time to teach your kids about money, it’s essential they understand the difference between earning a dollar and being given one. Earning money through effort, like chores or a job, builds pride, confidence, and a real sense of accomplishment. It teaches them that money is a reward for work and helps develop important skills like budgeting and saving.
In contrast, money that’s simply given may offer short-term benefits but often lacks the same life lessons. Kids might see it as an entitlement, missing out on understanding its true value and how to manage it wisely.
Ultimately, emphasizing earning over receiving helps children develop financial independence and respect for money. It’s not just about the dollar itself, but the growth and responsibility that come with earning it, which are key components to help your kids thrive financially.
Building Lasting Money Habits
I want my kids to understand that money is something we earn through effort, not something that simply appears. I’m teaching them to live within their means, to make thoughtful choices, and to view money as a tool to support their values. It’s not just about saving every penny or spending freely; it’s finding a balance between enjoying today and preparing wisely for tomorrow.
At Elevate Wealth Management, we believe that’s a lesson for all of us. Teaching kids about money starts with the examples we set, and that includes having a clear financial plan. If you’re looking for a trusted partner to help you balance living for today while planning for the future, we’re here for you. Schedule an introductory meeting by reaching out to us at rob@elevateasset.com or 307.461.5550.
About Rob
Rob Johnson is a financial advisor at Elevate Wealth Management, an independent, fee-only wealth management firm serving young professionals, pre-retirees, and retirees in Sheridan, Wyoming, and surrounding areas.
With a passion for helping others achieve their goals, Rob is committed to working closely with clients to empower them to make the best financial decisions for their lives. Rob understands that every person faces unique circumstances when it comes to their financial future, so he will tailor his approach and recommendations to ensure clients feel confident about the direction they’re headed. Rob has an enthusiasm for customer service, which is apparent during every client interaction he has. Honesty and integrity are at the center of the advice and recommendations he gives, and he will work hard to build and maintain trust in every relationship.
Rob has a bachelor’s degree in economics and finance from Black Hills State University and is actively working toward his CERTIFIED FINANCIAL PLANNER®, CFP® designation. He is a Wyoming native who grew up at the foot of the Big Horn Mountains in beautiful Dayton, Wyoming. He believes strongly in giving back to the community that helped raise him by volunteering his time and serving as an active board member with various non-profit organizations in the area.
Rob and his wife Emma have two sons, Michael and Sammy, who are the lights of their lives. Rob has a passion for sports and is an avid golfer. During the warmer months of the year, there’s a good chance you’ll find him on the first tee. To learn more about Rob, connect with him on LinkedIn.
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(1) Parents.com, “What to Teach Your Kids About Money,” May 30, 2024
(2) Lending Tree, 2025 Credit Card Debt Statistics, June 5, 2025