Teaching Your Kids To Invest In Value: The Hard Way

by on June 21, 2012

Every parent worries about how their kids will manage money regardless of socioeconomic status; no one wants their child to be broke or reckless with their money. Instilling good fiscal habits in your children starts when they are young, so really it is never too early to start teaching your kids how to invest their money, nor can it be too late.

One of the best ways to start teaching children about money is with a weekly allowance. It doesn’t have to be a lot of money; it just needs to have conditions. For example, some kids get a dollar a week for doing all of their chores in elementary school. If they don’t do their chores, they don’t get the dollar. This teaches the importance of doing work in exchange for currency; if you don’t follow through with the task, you don’t get paid. It’s how life works. It also assigns value and meaning to money. When they buy items, especially ones they really want, they see how much things cost and they attach a value to them. If they want to buy something more expensive, they realize that they have to work longer for it.

Part of giving your kids an allowance is also so you can stop buying them toys, clothes, or other extra things that they want but do not need. This will teach them to save their own money for the things they want, and will also teach them patience because if they only get a dollar a week it is probably going to take them awhile to save up for the things they want to buy. As a kid, having this extended period of saving towards a goal teaches how to make smart purchases because they can’t be as spontaneous with my money as they are with finding things they want. If a child buys something on a whim, it means not being able to get something they really wanted right away. This is a lesson that can be quickly learned for children as young as five.

teaching kids the hard way to investThis brings up another important point. Even if your kids are careful about their weekly allowances and do their best to save and make smart purchases, at some point, they will mess up. They will get sidetracked and buy something kind of dumb only to realize later that they don’t have the money for something they really want. When this happens, do not, under any circumstances, bail your child out. Even if they scream and cry and gnash their teeth, do not give them the money they need. Let them tantrum it out and use the experience as a way to teach them a valuable lesson about saving and spending money. Explain to them that they made a bad choice and now they have to deal with the unhappy consequences of that choice. They will be upset, but ultimately learn the importance of staying on track and not spending money on a whim. They will also learn that they have to work for the things they want, and this will hopefully boost their sense of independence. It is a simple way to teach kids the importance of money, the value of items and how to invest it. Though it is a simple technique, that doesn’t mean it won’t be hard for both you and the child. Although, it sure beats making these mistakes later in their years when it really matters.

{ 12 comments… read them below or add one }

Victoria July 2, 2012 at 5:03 pm

Excellent post, teaching our children about money from an early age is so important. They have to realize that money does not grow on trees and how expensive things are. It also is quite beneficial for them to realize that they have to work for money. We have 5 children and the best decision we could have ever made was to give them an allowance that they work for. I know some are against that and say give them free money; however, we don’t get free money and I want them to realize that they have to work for their money and will not just get it handed to them all of their lives. Great post!



Jevon Hayter August 15, 2012 at 10:38 am

I really enjoyed your article. It was very informative, I really needed this information
To make a good consumer decision. I read some relative information at forex tips.
I think your readers would enjoy this information also. Again thank you for sharing.


Mike Matney August 23, 2012 at 8:54 pm

Awesome post. So many parents really need to read this, so they know how to teach their children how to value money. It’s amazing how many college students end up in large amounts of debt because they have no idea how to manage money. They think if they can charge it, they can afford it, and it just doesn’t work out well that way. Thank for writing such an important post.


Andrea Thomas September 11, 2012 at 4:31 pm

I think kids will start learning how to handle their money while they’re still at school. I doubt it would be developed while they’re in elementary and high school since they still depend on their parents for money and allowance. I believe that it’s in college where they’ll start knowing the concepts of managing their money. Taking up subjects such as Economy will always help them gather ideas on the different things they can do to invest their money later on after they graduate. Overall, I believe it’s important for parents to give their children guidance, but at the same time they should still have freedom as they could be educated in school with their own free will.


Jenny September 16, 2012 at 5:08 am

I agree with most of your points. The lifestyle and culture of today’s teens and kids is supporting enough to teach them the value of money and ways to earn it. Most of the teens in their high school start looking for part time jobs. Thanks for posting an informative guide.
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Scott H. September 28, 2012 at 10:38 am

Messing up and making financial mistakes is just about as normal as being human. However, making those mistakes and even big ones while a child is much better than to do them at the college age level or beyond. Simple allowances and lessons on savings and money spent, even managing part time jobs and making payments on a big ticket item as a youth are all great learning experiences. These give children a primer to get ready for their adult lives and they will be able to implement a lot of these strategies for loans, investing, and budgeting.
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Svetlana Koslov September 29, 2012 at 5:08 pm

Since I don’t have kids of my own I’m definitely bookmarking this post to share with all parents I know. The information you share in this post is so valuable that I’d be remiss had I not tune into this post.Thanks for such an awesome post
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Lee October 2, 2012 at 7:15 am

Teaching children the value of money and money management from a young age is definatly an essential life skill that unfortunately a lot of parents seem to over look as seeing it as obvious because we take it for granted that everyone knows these things and often forget these are just young children and not adults.

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Suzzane Cachero January 1, 2013 at 12:05 am

Hello Chris,

Your most is amazing and a meaning message to parents. We all know that the brain and fiscal development of children starts at the young age. All parents of this world want their children to become a great and smart personality.

This dream comes true when parents take care on their children at every aspects of life , at the beginning of development.

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George January 16, 2013 at 4:41 pm

I really enjoyed your article. it’s only a matter of time before the world governments don’t have a choice and cave at this global energy shift.
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valentine February 5, 2013 at 4:51 am

I agree with you because kids should really learn how to save the little money they have so that it will be useful in the future.


Nia May 8, 2013 at 2:39 am

I really enjoy your article very nice to read, Very realistic article.
The point you covered is really very important. everyone should think on it.
even I am worried about the same. It’s Really very difficult to Instilling good fiscal habits in children starts when they are young. you really helped me out.


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