Helping Your Kids Make Sense of Dollars and Cents

By Kendra Miller

You want your children to be safe and happy and possess the skills needed to navigate successfully through life. According to Sam X. Renick, an award-winning author and co-creator of Sammy Rabbit, a children’s financial literacy initiative, one of the best foundations you can lay for your kids to do well in life is teaching good money habits. One way or another, kids will learn lessons about money even if you’re not the one teaching them.

Here’s how to play an active role in shaping your children’s feelings, thoughts and values about money.


After teaching children financial literacy for over 20 years, Renick has found the earlier you start the better. Attitudes about money habits can be formed by the age of seven, so it is best to start before then. Explain what money is and how it is used. Let them see you making purchases with cash or explain that a debit or credit card is still using money. Show them the receipts of what was purchased and allow them to ask questions. This introduction to spending money will lay a foundation for later when they have money of their own to spend.


The early introduction to money should not only revolve around spending, but should also introduce the concept of saving money. In addition to being a good money habit, Renick says, “saving teaches discipline and delayed gratification. Saving teaches goal-setting and planning. Saving stresses being prepared. Saving builds security and independence.” These important skills and habits will help in other areas of life as well.


In order for children to practice spending and saving habits, they need to have money of their own. Your children may receive financial gifts at birthdays and holidays, but consider requiring certain chores for them to earn an allowance as well. According to Renick, “just about everyone values money they earn differently than money they receive.”

Once your kids start earning money of their own, help them understand that personal finance is all about decisions that affect not only today but can impact tomorrow as well. If you choose to spend money on something today and not save it, you may not be able to buy something you really want or need later.


Perhaps the most important of all these steps is to model the good financial habits you hope your children will adopt. Leading by example is the best way to send clear messages about spending and saving decisions. Most of all, be consistent with your methods and be patient as your children learn financial lessons.

Educating your children about personal finance is a process that can take time. But if you put in the effort and continuously communicate a clear message about money, you will instill good habits that will serve your children well throughout life.


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