Dos and Don’ts of Teaching Kids Money Smarts

Some parents have almost as difficult a time talking with their teenagers about money as they do talking with them about sex. But teaching your kids the value of money is critical to their survival in the real world. Here are a few tips to help them on their way to financial independence:

1. Have the talk. If you don’t talk about money, your kids may end up thinking that it grows on trees and they don’t have to worry about it. They want to buy the things their friends have, with no concept of where the money comes from, or the difference between needs and wants.

2. If you feel awkward talking with your teen about money, look for help.,, ING Direct’s Planet Orange, and are some of the many websites designed to help parents educate themselves and their children about money.

3. Don’t give teenagers an allowance. A study at the University of Washington that examined more than 50 years’ of allowance research found that the kids who received a regular, unconditional allowance thought much less about money and were more likely to grow up to be “slackers.” Giving teens an allowance for chores is also a bad idea, as it teaches them that working for money isn’t fun.

4. Be aware of the messages you send. How you talk about money and how you manage money will strongly affect the way your teens learn to manage money.

5. Encourage your teen to get a job. Help him or her figure out how to set aside part of each paycheck in a savings account.

6. Help her save for something special. Every teenager hankers after something she cannot afford: a car, a laptop, a camera. Teach your teen to funnel a small part of her income into an interest-earning savings account for her dream purchase. She will never forget the thrill of watching her money grow and paying for the item herself.

7. Don’t give your teenager a credit card. Many kids think of credit cards as a magic wand they can use to buy things, without ever thinking of the real cost of an item.

8. Help your teen avoid debt. If he spends $300 on text messaging or on fancy apps for his iPhone, use those mistakes as lessons.

9. Let your teen help you write checks and balance your bank accounts. Use an old-fashioned checkbook rather than paying online. When you make payments over the Internet, the money seems fictional. Writing a number on a check, signing it, and putting it into a stamped envelope gives teens a more concrete feeling about money and its meaning.

Sources: NPR, US News & World Report,,,

Become more interesting every week!

Get our Read Up newsletter

how we use your e-mail
We will use your email address to send you the newsletter each week, and we may also send you occasional special offers from Reader's Digest. For more information please read our privacy policy.

One thought on “Dos and Don’ts of Teaching Kids Money Smarts

  1. Working for money isn’t fun… at any age.. so let them get used to it when they are teenagers and it will be less difficult for them adjusting to adulthood, and maybe then they will also understand what you went through in order to raise them and give them everything they need.  It isn’t called HARD work for no reason!

Leave a Reply

Your email address will not be published. Required fields are marked *

Some people like to travel by train because 
it combines the slowness of a car with the cramped public exposure of 
an airplane.

Dennis Miller

I think my pilot was a little inexperienced. We were sitting on the runway, and he said, “OK, folks, we’re gonna be taking off in a just few—whoa! Here we go.”

Kevin Nealon

“I can’t wait until your vacation is over.” 
—Everyone following you on Instagram


A man knocked on my door and asked for a donation toward the local swimming pool. So I gave him a glass of water.

Comedian Greg Davies

Funny Jokes

Just found the worst page in the entire dictionary. What I saw was disgraceful, disgusting, dishonest, and disingenuous.


Funny Jokes

Client: We need you to log in to the YouTube and make all our company videos viral.


Funny Jokes

My cat just walked up to the paper shredder and said, “Teach me 
everything you know.”


Funny Jokes

“Just because you can’t dance doesn’t mean you shouldn’t dance.” 

@yoyoha (Josh Hara)

Funny Jokes

My parents didn’t want to move to Florida, but they turned 60 and that’s the law.

—Jerry Seinfeld

Funny Jokes

Q: What do you call an Amish guy with his hand in a horse’s mouth?

A: A mechanic.

Reader's Digest Survey

Click on the image above to take our survey