How To Teach Kids The Value of Earning Money

Updated: May 24, 2020

Do your kids think ATMs dispense any amount of cash we want forever? Before they think you have an infinite source of money, your kids need to know how much hard work it takes to make money, and that it is not limitless.

Introduce money lessons to your children and make it a fun learning discovery for them. Let them know that even at their age, they can make their own money.

It could be saving a part of their daily allowance, doing a special chore for extra cash, or earning money from old clothes and toys they could sell (with your help).

Here are ways you can impart the value of earning money to your little ones.

Explain how you make money

Debunk any belief that you have limitless cash in that money machine. Explain in their level of understanding where you’re going whenever you leave the house on weekdays. You have to go to work so you can get money from the ATM every two weeks or by the end of the month because that’s when your boss pays you.

Tell them that when you work hard, you receive money in return so you can buy food, clothes, toys, send them to school, and or go to a family vacation when they want to.

Build their money skills

You can introduce money at the age of 3 or as soon as your kids learn how to count. They won’t understand its value but you can help them identify a penny from nickel. Teach them the names of different coins and bills.

To help them become more familiar with the names and monetary values, your best strategy is to play store. Create play money and gather empty boxes or containers of items at home. Pretend that you’re the store owner and your kids are the shoppers. Show them the things they can buy with the amount they have on hand.

Show them actual transactions

Whenever you need to buy or pay for something, explain to your kids how the transaction goes. Let’s say you’re on a weekend trip and you stopped by a pizza corner, bring them with you to the counter and let them hand over the payment.

Do the same thing when you go to a gas station or a convenience store. When done repeatedly, these little experiences will stick with them until they’re big enough to do the transactions themselves.

This also the perfect opportunity for you to instill not just the monetary value but the value of every amount to spend.

Tell them they can’t always buy everything they want with all the money they have. Teach them how to decide which item to prioritize over the others and let them realize the difference between a want and a need.

Allow them to handle their own money

Let your kids have cash on hand but don’t forget to teach them how to handle it the right way. Once they learned about your hard work to earn that cash, teach them how to spend it wisely.

Allow them to decide what to do with the money. If they buy a toy on a whim with all the amount they have, and then get hungry and want chicken nuggets, don’t scold them. Help them understand what happens when you’re not being careful in spending money. It’s okay if they get to experience this so they will value it more when they earn it again.

Help set their goals

Young children often have things they want to buy but are not immediate or actual needs. These could be a trending but a really expensive toy or a new pair of shoes they only want because they saw your neighbor wearing it.

But because you have lessons you need them to learn and understand by heart, you shouldn’t always say yes. Instead, tell your kids they can have them IF they have the money. This is the point when the crucial spend vs save battle happens the most.

Allow your kid to experience saving up for something. Telling them many times to save money won’t really motivate them if it’s not clear what they’re saving for.

If there’s one thing they want to buy or do (like go to Disneyland), encourage them to have their goal and show them far they are from achieving it. Let them know how much money do they have to make and save, and for how long they need to grow their fund.

Put their savings in a jar and seal it, or you can use a time-lock container so they can’t touch it until it’s time. It builds up the excitement and determination when they can see their weekly or monthly progress.

Speaking of progress, print out a savings tracker and post it in their room so they can mark their wins. For every week of successful saving, give them a positive reinforcement–bake special cookies or prepare their favorite dinner.

Show how they can earn more

It’s great to teach your kids how to earn money even while they’re young. You can visit a thrift store to let them know they can make money out of old stuff.

Encourage your kids to sell their old clothes, toys, and books so other kids can use them instead of being dump on a landfill.

Have a list of other “small jobs” they can do at home that’s not part of your everyday chores. Assign a corresponding value to each task and let them pick what they want to do depending on how much money they want to earn.

It could be cleaning the dog house, pulling weeds, or tidying up the playroom. The list can go on if your kids have goals for earning extra cash.

Talking about financial matters to your kids is not as complicated as you may think it is. If you teach them money lessons at a young age and guide them as they form the right habit of spending and saving, it would not be difficult for them to manage their own finances as they grow old.

It’s also important that you tell them the truth whenever they ask about the money you have in the bank. You need not go into details but at least you let them know the things and the lifestyle you can afford so they would appreciate and value what you can provide them.

Let the little ones develop their financial skills while they’re young and raise a money-smart individual.

This article was contributed by Sophie Smith. She’s an aspiring blogger who loves to write articles about anything and everything under the sun. Get to know her by following her on Twitter, @Sophie___Smith

What to do next: Click here to start your financial journey with IMG Wealth Academy


  1. Where is the thumbs up button? I will smack that bad boy a thousand times! Thank you Fitz for putting up this wonderful article. It is so true that “money skills” are generally NOT taught in schools. I believe that those with money know the importance of a budget, a spending plan, investing and so on and they will attempt to instill those skills to their offspring. Folks with little money often feel that they do not have enough to bother spending time on these important things. Often they will blow out a check on payday, struggle until the next payday AND the cycle repeats!

    My beautiful bride brought three great kids to our marriage. Before we were married, she had an apartment and part time YaYa. I have written before about how she was always self sufficient and self supporting because of her great skill as an academic writer. The “troops” as I like to call them, had the blessing of watching Mom earn from home. They all knew where their bacon & eggs came from!!! Mom did not have a written plan (that has changed) but on paydays, all bills were covered, WiFi load for researching and sending in work was purchased. Groceries were stocked and the rent paid up and then, IT WAS PARTY TIME. Once every month, my future wife took the gang out for a great lunch or dinner and a mall visit.

    These days we do have written plans and it was my wife that created the plan! She now sees the value in the new ideas (written budget and spending plans) I brought to our marriage. I AM NOT a believer in handing out money to kids for those things they are and should be responsible for. What I do promote is paying real money for real work. Want a job? The office needs to be cleaned and the desk will look good if someone would tidy it up.

    Well, here we are approaching the end of May 2020 and hopefully the Philippines will get ahead of the COVID-19 virus. This weekend made me a very happy man. Teenagers can be difficult to deal with at times, I am sure most parents will agree. No exception with our super smart 12 year old. This weekend, something absolutely magnificent happened. My wife took only small quick projects to free up some family time. One of the companies she writes for asked if she could do a paper AND include some dress designs inspired by the little mermaid. Not at all the kind of projects my wife normally does but she asked our 12 year old, Veronica, if she would like to do the artwork. Mom got a resounding YES. They purchased an app for P149 to help with the design work. Mom did the writing and Veronica did the designing! They will split the P3000 payment for the project minus the cost of the app. The product must have been OK as the contact person at the company asked if Mom and daughter would be willing to take more projects like this in the future. He said it was great work!!!! Yours truly is super happy to see Mom and daughter collaborating on income projects and NOT squabbling over small inconsequential issues.

    AGAIN, Fitz, a helpful and timely post. THANK YOU man.

  2. You’re welcome, Jack. And I thank you for always leaving a comment. I really appreciate the effort. 😀

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