Simple Steps to Teach Your Children About Money

As your children grow up, the lessons you teach them become more sophisticated. That should be true even when the topic is money. But many people are uncomfortable discussing finances, so you might feel unsure of where to start or how to convey increasingly complex concepts.

Here are a few conversation starters and activities you can use to begin — and continue — teaching kids about money and personal finance.

1. Use cash

You can introduce even very young children to the idea of money through simple activities like shopping. Make cash purchases, and let your kids help count the money. Use coupons to teach
them about discounts — and save some money at the same time. 

Shopping can also show slightly older kids how to compare prices. For example, when you’re at the grocery store, point out price differences for various sizes of certain products. Describe how you'd calculate the price per ounce so your children can compare prices on their own.

2. Promote entrepreneurship

Starting businesses can get kids of all ages more comfortable with money. Younger kids can open lemonade stands; older kids can branch out into areas they enjoy. For example, a kid who likes to draw or paint could open a card-making business. A kid with a green thumb could start a flower or vegetable garden. Help them determine how much to charge for their goods by calculating the costs of production and adding a premium for their time.

You could also use this as an opportunity to give your children a loan and explain interest and the borrowing process.

It's up to you how involved your children should become in their businesses, but starting one can be a fun and rewarding way for them to understand the value of work. And remember, it’s also a great way to spend time with your kids.

3. Set up a bank account

Once your kids are earning some money, whether through their own businesses or allowances, consider setting up bank accounts in their names. Kids will take great pride in it, and it will teach them about banking, saving and record keeping when they note deposits and withdrawals. If you want to get more in-depth, open up an interest-bearing account and show them how this interest can compound over time.

4. Create money goals

Now that your children have a place to put saved money, they can start setting it aside for things they want. Help them determine all of the costs associated with their goals and then develop a budget and asavings plan. It’s a great way to teach them about reducing expenses so they can reach their goals more quickly. And the more excited they are about their rewards, the more likely they are to stick with their budgets.

5. Encourage giving

If philanthropy is important to you, talk to your children about charitable donations. Help them research a few organizations that support causes they believe in, and then help them set and save up for a donation goal. Each time they get money for their birthdays, their allowances or from paychecks, encourage them to set some aside for the cause. And if the charity is local, consider volunteering together or visiting for a tour.

6. Open the door for investing

Just as bank accounts help kids learn about saving, opening simple investment accounts for young adults and teens can teach them the basics of investing. Pick a short list of stocks or other investments you're comfortable with purchasing and help your children research the ones you've chosen to find their favorites. Then you can easily open low-cost trading accounts and help them buy stock. Many kids are amazed when they encounter a product from a company in their portfolio — they're excited to have “ownership” in that company!

7. Discuss the risks of bad credit

Give older kids a lesson on credit scores. Explain that behaviors such as paying bills on time increase your score, while paying bills late or missing payments can lower it. You can also describe how having bad credit can make it harder for you to borrow money to pay for a car, school or a house, or even to rent an apartment — and make it more expensive to borrow when you are approved.

To make the lesson more tangible, pull your own free credit score and talk about how it has impacted your family. This can open up the conversation to other areas of your family’s finances, giving your children even greater understanding about earning, spending and saving. And as they get older, you can also help them decide how to protect themselves from identity theft, which can damage their credit scores.

8. Recruit outside help

Consider asking your family’s financial advisor or attorney to help explain complicated subjects such as trusts or IRAs. This will open lines of communication with these financial authorities so teens and college-age kids feel more comfortable talking with them in the future. Many professionals also speak at events for educational purposes. Attending a talk with your children can be beneficial.

By teaching your children about money early in their lives, you'll help them start their journey toward financial independence. Fortunately, there many ways to get them started on the right foot financially. 


Heather Castle

I am originally from Virginia and grew up in Tuscaloosa, Al.  I completed both of my degrees at the University of Alabama.  My undergrad degree in Finance and then later my MBA from the Manderson Business School through their Executive MBA program. 

I started Castle Wealth Advisors, LLC because I wanted to provide ethical and approachable financial planning and investment management to individuals and business owners, concerned with their financial futures, regardless of age, sex, race, or net worth.

I've always believed clients should work with reputable, qualified, and experienced advisors.  So it was important to me to gain industry experience as well as pursuing additional industry specific designations.  I have passed the following licensing exams:

     Series 7, General Securities Representative

     Series 66, Investment Advisor Representative 

     Series 9 & 10, General Securities Sales Supervisor

     California Life, Health, and Variable Insurance (License #0K01554)

I have been in the financial services industry since 2006 and have work with many differing type of clients over the years.  One thing I know to be true, everyone wants to feel heard and cared about.  Meaning everyone I have ever worked with wants to feel like their desires, wants and needs have been heard and taken into consideration when speaking about their personal financial matters.

Many people have the same goals, they just express them differently, and then there are a few who’s view and desires are completely different.  This is one of the aspects I love about my job.  The PEOPLE!  I get to meet some many interesting people and they challenge me daily.  No day in my line of work is the same.  Today I could be planning for a family who owns a small business and tomorrow working with a women going through a painful divorce.  Listening and building financial plans and strategies around personal needs is why many of my clients have said they do business with me and have stayed with me. 

Another reason I love my job… I get to truly HELP people.  I get to make a living and provide for my family while helping others.  Over my career I have felt a need to dive deeper into financial planning and working with high net worth individuals who have greater planning and investing needs.  Listed below I have highlighted a few of the areas I specialize in:

·      Women in transition (divorce/ death)

·      Corporate Executives

·      Young Entrepreneurs

·      Small Business Owners

·      Family with Special Needs Members

·      Complex Retirement and Estate Planning Needs

Currently I live in Brentwood and really enjoy the West Side of Los Angeles.  I am actively involved with the Junior League of Los Angeles.  I have a passion for trying new things and new experiences.  So, in my free time I love traveling and scuba diving.  I also am interested in learning French, taking pilot’s lessons and dancing the tango!