Money and Children


I sometimes get questions from subscribers to my newsletters about money and children. The two most common types are related to how to deal with the subject and how kids can make money. Many emails come from children in fact, and a little article I wrote called Six Ways for Kids to Make Money is one of the most viewed of about a thousand articles I have at So I thought it was time to write something here about the subject.

I don't have kids, by the way, so my opinions are based on my own childhood experiences as well as observation of how many families deal with teaching children about money. My number one recommendation is that you do teach them something. The lessons that will otherwise be absorbed from the culture around them are not likely to be helpful later in life, to say the least.

My own parents did not consciously teach my brothers and I about money topics, but we learned by example both the importance of money and some good habits with regard to handling it. They tended to spend less than they made, they saved for the future, they looked for less-expensive alternatives when shopping, and they both worked hard. These are all good lessons to learn.

Somehow, on our own, we learned the more entrepreneurial attitudes. I should mention that I had four brothers, and all of them have been involved in businesses of various sorts over the years. As a child we also had many little "businesses." Not all of them were traditional or the nicest operations. For example, I used to sell my vote to the highest bidder for the which television show we would watch (majority vote won). Call that the business of politics.

In the great paper wad wars my brothers had I collected and sold the spent paper-wads back to the combatants (who couldn't risk picking them up for fear of being attacked). Paper wads, in case you don't know, are folded and bent paper "bullets" fired at each other using rubber bands. I was a non-combatant, because it made more sense to be a war profiteer. I sold the paper bullets back to my brothers for a couple cents each.

In school I sold candy out of a hollow book and from pockets I had sewn inside my jacket (to hide the merchandise from teachers). I also sold snacks, pens and other things, aiming for at least 50% margins. I never sold drugs, but I would have been good at it because I never would have consumed my profits like many dealers in school did.

I also sold Playboy magazines that I found a public recycling bins. My store was my locker in my freshman year of high school, and as I recall I charged only a dollar each - probably too low, but they cost me nothing.

At home I ran casino games and carnival games for my brothers. A good part of their paper route money went into my first bank account, which I opened on my own at age ten or eleven.

I am certainly not recommending that kids do any of these things, but then there were many things I did that were not so out there, including cleaning for people, making sandwiches, shoveling snow, and anything else that paid. What I am recommending is that money be something children learn about relatively early in life, perhaps by way of paid chores. I can tell you from experience and from watching friends who were raised in other ways struggle with having to work, that good working and money management habits are a blessing later in life. They make everything less stressful.

If you have good financial habits your kids will tend to learn those in any case, but some more specific principles that are worth teaching them - both through words and actions - include:

1. Money is not an end in itself and should never be pursued at the expense of more important values.

2. Money is important, and is necessary for modern life. It's necessary if you care about the people you love, for example, because it buys health care, education, as well as food and other necessities.

3. Work - either mental or physical - is how you make money. Money obtained in other ways is less secure, and had to be made by somebody else's hard work.

4. We are all in business - even employees are in the business of marketing and selling their labor - and the primary way you profit in business is by serving others.

There are many other things to say about money and children. It's worth teaching the concept of investing; using your brains to make money work for you. It's worth teaching kids that debt only makes sense when the money borrowed is invested to save or make more than it costs in interest. The list goes on, and come to think of it, these money lessons may be needed by as many adults as children.

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Every Way to Make Money | Money and Children