A Dad’s Guide to Teaching Basic Money Management

  by Chris Horst

Managing money is a skill your kids will carry with them forever. And yet, teaching our children the skills associated with this has been a bit of a challenge for my wife and me to wrap our minds around. Where do we start? Do we just arbitrarily start giving allowances? How old should they be to start getting an allowance? Should our kids save? Should they give to charity? Do we pay them for chores?

We haven’t yet figured it all out, but our initial forays into helping our kids develop good money sense seems to be working, so I’ll share it here. We did not create this approach, but it’s an approach we’ve enjoyed using. It’s simple enough that our family can follow it but thoughtful enough that it’s passing along some key ideas to newbie money managers.

Our oldest kid is 6. We started what I’ll outline below about six months ago.

On allowances: We don’t pay a weekly allowance (though, we don’t go “full Ramsey” —this will likely be something we institute when he’s older). But, for special chores, we’ll pay him an age-appropriate wage. I say *special* chores, because we don’t want him thinking that he’ll get paid for every single thing he does around the house. He needs to keep his room somewhat tidy, is expected to put his dirty clothes in his hamper, and be an all-around contributor at home. But, when he helps us clean the house, washes the floors, cleans the baseboards, or weeds the garden, we love passing along a few quarters to help him realize how wages work. And, it incents him to go above-and-beyond in being helpful to our family.

On saving vs. spending vs. giving: We gave our son three tins—one each for spending, giving, and saving. We encourage him to divide his earnings into those three tins, but have given him autonomy on how to divide his money between the three.

Spending, we’ve taught him, is for easy purchases. At this age, that’s candy, trinkets, and sodas.

Saving is for things he won’t be able to buy easily. Right now, these are big ticket items like Lego kits and other pricier toys.

Giving is something we encourage him to invest in even with his meager earnings. And, frankly, he’s really taken to this. It’s been so fun to see him deliberate on how to divvy out his wages. And, he is often surprising us with how open-handed he is with the giving tin, regularly depositing far more than the 10% general “tithe” guide we’ve suggested to him.

There’s more to teach than these basic categories, but this is a start … for all of us.


To dig in more, you might check out ThreeJars and check out these apps.

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Picture by Fabian Blank; Used via Unsplash license.