Teaching Children About Money


Welcome to another week of financial learning. Today, I want us to discuss how we can teach our children about money. A study by the University of Cambridge found that money habits in children are formed by the time they are 7 years old. Children are watching us. 


If you are smashing doors whenever you get angry at home, they will eventually notice. If you and your spouse are arguing about money, they will notice that too. It is therefore important that we set good examples for them to follow. Children and youth of today are smarter and more advanced in the mind due to technology. Kids as young as 1 year can operate mobile phones at home. 

Money habits in children are formed by the time they are 7 years old.

The family is the first place most of us learn about money. Over a third of respondents in the Invest in You Savings Survey (U.S.A) said their financial role model was a parent. Men had a slight edge as the go-to parent: 19% of participants said it was their dad, and 18% said it was their mom.

As parents, we have the best opportunity of molding our children into the best future shape that we want. In one of my articles, I made mention that, the best legacy one can leave with his next generation is financial wisdom. 


The question therefore is, what are we teaching our kids? What financial habits are they learning from us? Can they look after your legacy the way you would have wanted if you were alive?


The best person to answer these questions is you! 

I would want to share a few things that we can do to turn around this tide of wasteful generation.



The following are some of the ways we can teach our children basic principles towards financial freedom;



The first step towards financial discipline starts with having a personal budget. Budget becomes a road map that guides us around what we buy, where we go, where we invest etc. Our children also need this budget to control their spending habits and urges.

Since many teens are glued to their mobile device nowadays, get them active on our simple budgeting app. Now is the time to get your teen in the habit of budgeting their income—no matter how small it is. They should learn the importance of making a plan for their money while they are still under your roof.

Help them in drawing this simple budget. Walk them through what should be in their budget and then guide them to go by it. Once your kid begins to follow after his budget, your job as parents is 50% done. Meet them periodically to assess their progress made with encouragements where targets were not met.

Promise them gifts for budget victories. These are all psychological means of winning your child’s mind towards financial discipline. Do not leave this job to a stranger or teacher!

Another school of thought says that we should consider giving kids money instead of gifts for their birthday. We would then encourage them to use the money to purchase things that they need for the celebration. This not only saves you time on shopping, but it also empowers kids to do the math and be shrewd.


One of the biggest things you can teach young kids is for them to know the difference between needs vs. wants. Taking family decisions at home should not be the sole preserve of parents. I said in the introduction that, kids best way of learning is by observation. We need to start involving them in purchases at home. They ought to understand what needs and wants are about when considering available family funds. We need to inculcate in them how the family even makes money.

Patti Valeri, a senior wealth strategist at PNC Wealth Management, recommends cluing kids into family discussions about other expenses, such as a car or an upcoming vacation. “Having the conversation sooner than later is important, even if it seems like it’s over their heads,” she said. Let them hear decision-making around how you spend money. With time they will appreciate why a particular want can not be met whiles the family pursues needs.

Involving them also helps in reducing impulse buying initiated by children. They already know what items you planned to buy from the house. They will therefore not be easily coerced when they see things not agreed upon as a family.


At age 5, your child should know about a normal bank account. It is our sole responsibility as parents to take them through the operation and necessary state of having a bank account. We need to progress that discussion with a junior account for them. They should own that account with deposits. Take them to the bank on weekends to make deposits.

The purpose of this account should be well understood with the kid right from the onset. Deposits should be based on the weekly allowance you might want to be giving to your child.

This process takes money management to the next level, and will hopefully prepare them for managing a much heftier account when they get older. Do not take this process for granted.

In addition to the bank account, get them piggy boxes at home. The piggy box will serve as the first point of savings call. Encourage them to drop in extra monies on them instead of buying toffees and chocolates. Yesterday, they had a 5GHS. Today, they have 7 GHS. 

Talk through this with them and make a big deal about it growing!


Financial education is not only about making money and saving. Readers will appreciate my viewpoint on giving. In one of my articles, I stressed on giving as a cardinal point towards wealth creation. I believe human being offers more blessing with an act of kindness than monetary benefits. As parents, we need to teach our children to be content with whatever you can afford them now. Children often get agitated for more than what you offer based on what they see around them.

Your teen probably spends a good chunk of their time staring at a screen as they scroll through social media. They are seeing the highlight reel of their friends, family and even total strangers! It is the quickest way to bring on the comparison trap. You may hear things like:

“Dad, this boy at school got an iPhone 7 on his 12th birthday party. I want some too!”

Contentment starts in the heart. Let your teen know that you can still throw a memorable, milestone birthday party without spending a chunk of your retirement savings funding it!

Do not expose your kids to excessive spending way above your strength. This is where their knowledge on the family financial status will come handy.




As you teach your children the basic principles of savings and money management, we also need to nurture them on how to make money. Your child is very smart and intelligent no matter what his exams report card says!

When you think about it, children have plenty of free time—December break, April break, and August break. They mostly go for classes during this time. Beyond the classes, they still loiter at home idle. This is the best time to carve them into Entrepreneurs by learning a trade or skill.

Push them to learn less hectic trade that can fetch them extra income like app development, IT networking, graphic designing, etc.

The bottom line of this point is that our children should be enlightened on how we make money and how they can also start their path. Push them to be attending entrepreneurship summits and other educational trips.

The above points are not conclusive! There are other things that we can do safeguard the next generation financially. Apportion a little bit of time in training your kids to be financially disciplined else, they will mismanage your hard-earned wealth in your absence.

I wish everyone a wonderful and memorable week!


Next articleThe Retirement Fear- 102
Patrick Baah is a chartered banker with over 5 years experience in main stream banking having worked in various capacities. He is currently at the Branch Manager Position of his institution. He has been a qualified member of the Chartered Institute of Bankers, Ghana with a good membership standing since the year 2013. He also holds EMBA and BA from Kwame Nkrumah University of Science, Technology, and the University of Ghana respectively. Patrick is the originator of the daily epistle dubbed “Savings Tip of the Day” which has been running for over a year on WhatsApp and Facebook. Patrick has also been teaching on the Topics Savings, Investment and Financial Independence for over 2 years and a research fellow for ILAPI Ghana. He runs a financial channel on Youtube by name “Patrick TV Gh” and has appeared a couple of times on the business segment of TV3 News 360. Patrick is into youth facilitation and counselling. I can be contacted via baasco2006@gmail.com and or 0243984492.


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