Raising financially responsible kids

Raising financially responsible kids

There’s a lot of noise about the lack of financial education for children, but so far not enough action. The school curriculum has come under fire for not giving kids the knowledge they need to be able to manage money in the real world.

I’m a huge advocate for financial education in schools. It’s a crucial step in making sure kids grow into adults that are able to understand the financial world. However, we’re missing something else; teaching children to have the right attitude towards money.

As with many things in life, knowledge cannot make up for the wrong attitude towards money. Schools can try to cultivate the right attitude towards money and debt, but families are in the best position to do this. Your children see how you handle money on a day to day basis, and like it or not, it makes a big impression.

Raising financially responsible kids

There’s not a single thing that makes a child grow into an adult that’s good with money. At least, I can’t pinpoint something specific from my childhood. I wrote about fear of missing out and opportunity cost decisions that my dad gave me the opportunity to make.

There was also a feeling that money was hard to gain and easy to lose, a resource that should not be wasted. This helped cultivate a positive relationship with money when I was younger. Here are some of the sayings (and statements) I remember my parents and grandparents using and living by as I was growing up.

It’s not what you earn, it’s what you spend

As I got older, I’d be cheekier and retort “It’s a little bit what you earn”. My dad wanted to instill in me that if you choose to do use all your money up doing things and buying things, you’ll have no money left, no matter the amount that you earned the first place.

A fool and their money are soon parted

This is a favourite phrase of my dad’s, especially when someone (including me) had spend money on something he thought was a waste. When aimed at me, it made me question the way I’d chosen to spend money from the point I was able to start making decisions

You’ll need your money when you’re older

This was a phrase from Nana. She’d give us a couple of pounds pocket money when she saw us, and it would often be accompanied by this phrase. It helped fix the idea of my future self at a young age. Most of that pocket money went straight into my savings account and was part of the deposit when I bought my house (thanks Nana!)

Look after the pennies, and the pounds look after themselves

I can’t help but roll my eyes when someone says this to me now. For some reason, it was accompanied by a wag of the finger when said by my Dad. It’s a good reminder that small amounts of money that may seem insignificant add up to large amounts of money when pooled together. It’s the reason I don’t like to buy bottles of water or ad hoc bags of crisps when I’m out.

Whatever you do, never, ever get in debt

This was only said to me only once and at an age when I thought I knew it all. My grandad leaned forward in his chair to deliver this sage advice in an ominous tone. This cheeky teen couldn’t help but reply “what about a mortgage”. He updated the advice. “Other than a mortgage, never, ever get into debt.”

Houses are expensive

This becomes so obvious when you have a house, but it isn’t when you’re a child. You have no concept of how much your parents earn compared to the cost of your family’s lifestyle. Why and how could houses be particularly expensive when everyone lives in one? This regular warning discouraged me from spending pocket money on useless tat, and paying it into my savings account instead.

Money doesn’t grow on trees and I’m not made of money

Although I never heard my parents worry or argue about money (and I know now that money was very tight for a long time) it has always been clear that there are limits to money, that it has to be earned, and we can’t have everything we want. The fact that our money was finite contributed to my fear of missing out on something better.

Money can’t buy happiness… but it sure does help

We all know that money can’t buy happiness. Most of us have probably experienced the feeling of emptiness after a session of retail therapy. But a lack of money that leads to debt can cause a lot of unhappiness and stress. Money also gives peace of mind, greater freedom and a greater capacity to be generous, all of which lay the foundations for happiness.


Actions speak louder than words

It’s not enough to simply share these pearls of wisdom with your children, they need to see you practice what you preach too. Which means saving up for the things you want, instead of getting into debt, and not scooping a few impulse purchases onto the conveyor belt when you do your shopping.

My Christmas gifts were probably smaller than most, if not all, of my friends. How ironic that that is the best gift that I could have been given.

What money sayings do your family use and does it influence how you spend your money?

12 thoughts on “Raising financially responsible kids

  1. I don’t remember any particular sayings, but my parents were clear that credit card debt was something to be avoided at all costs. They did use credit cards now and then, but explained to me that they were paid off each month before interest payments were due. It must have worked – I never had credit card debt (though I’ve had plenty of other debt).

    As a mother of two teens, I often wonder if my advice is falling on deaf ears. Hopefully they hear me and will listen as they become more independent with their own money.

    1. You can never know for sure until they’re out there and making their own decisions. Given how much fun you have doing free stuff with your family and your whole attitude to money, I’d be amazed if they don’t follow in your footsteps, even if there’s a momentary wobble with first paychecks!

  2. Hi Sarah,

    I stumbled over here from RSF. I love the “tortoise” reference in your blog name!

    My Dad used to always tell me, “There’s no such thing as a free lunch!” To which, I’d reply “Well it was free for me. You’re paying!”

    I was actually pretty lucky to grow up with dueling ideas about money. My Dad was pretty frugal, and my Mom not so much. Ultimately I learned to find a balance between the two which I feel has made me quite happy. 🙂

    1. Hi Michael, I’m so glad you did! 🙂

      I love your response to “There’s no such thing as a free lunch!” I can tell you know that if I’d said “There is for me, you’re paying”, he’d have responded “It all just comes out of your inheritance!”

      If anything, I lent towards being too tight with money. My husband isn’t exactly a spender, but is good at showing me that sometimes money is worth spending. Awesome that you’ve got that balance. Like me, sounds like you’ve won the ‘parent lottery’!

  3. Great post.

    I definitely think more kids should learn about personal finance before they go off to college. I certainly didn’t know too much about student debt before I went. Thank god I didn’t get saddled with a mountain of debt!

    I think the best thing my mom taught me was to save money and buy based on value.

    1. Thanks Andrew. It’s awesome that you managed to avoid being saddled with a mountain of debt, but really college students should have more education so that more people can say the same thing.

      They’re both great lessons. My husband can’t help saying “Buy cheap, buy twice” when I’m trying to economise far too much.

  4. Nice post! We talk about money a lot with our kiddo, in part because I wish my parents had been more explicit about money when I was younger. (my husband’s were more open, like your family seems to have been with you.)

    Little Bit has a pretty good idea of what things like electrical bills, groceries, cars, a college education and houses cost, as well as many of her toys. Having an allowance and letting her decide what things are worth spending her money on helps a lot. She definitely thinks more about how long she has to save for certain things.

    1. Thanks Emily! There were lots of gaps in my knowledge, but they laid a really solid foundation. Giving kids financial skills is something more parents are being much more deliberate about, especially in the PF community. It’s exciting to see what the next generation will be like. I honestly think your daughter will be so grateful for these lessons when she’s older, especially when her peers make the mistakes you’ve enabled her to avoid 🙂

  5. Whenever I would want to something my Dad would tell me to go outside and water the money tree.

    It makes me laugh looking back now because it use to make me so mad but the picture now of watching my investment grow is such a powerful picture to me.

    With that said I hope to teach my son everything he needs to know that he won’t need financial education in school 🙂

    1. You guys had a money tree??? 😉 I think it’s good to teach children there’s a limit. Otherwise, they’re in for a shock in the real world.

      Your son is so lucky to have someone who knows finances to teach him. I really hope to inspire parents who don’t have the knowledge of don’t feel they can teach children all they need to know about money, because teaching the right attitude is such a powerful thing!

  6. Great post!

    The line I remember most was my grandfather asking me “did you bring your wallet?” when I wanted something. Inevitably I’d respond in the negative, and he would reply “what makes you think it is ok to waste MY money on something when you are unwilling to spend YOUR money on it?”.

    Is a huge contrast to my 4 year old, who thinks the Amazon Prime delivery man is cooler (and faster) than Santa!

    1. I love this response of your Grandad’s! The trouble with the rise of paying by card and internet shopping is that children see less and less cash being handed over. Money is hard enough to understand when you can physically see it!

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