Handling money wisely is difficult for people of all ages, but it seems to be an especially tricky concept for kids as money has become less tangible.

When I was growing up, I saw cash and checks being used as the normal form of payment. Kids today see mom and dad swiping a card at Target, placing an order via Alexa, or pushing a button on their phone and Amazon boxes full of stuff just magically appear on the doorstep.

There is also a lack of financial education being taught in school, so what they do learn is picked up from their parents or friends and the rest is learned purely by trial and error. So, it is important that we are mindful of what children are observing and what we are teaching them. Kids as young as age 3 are interested in money and are capable of understanding very basic concepts.

A study in the Journal of Financial Therapy states that many of our attitudes and biases concerning money are shaped by age 10. (Klontz, Britt, Mentzer, & Klontz, 2011) It is really difficult to change a behavior once it’s been ingrained, which is why it is crucial to instill good money behaviors, habits, and practices as early as possible.

Here are three concepts that your kids should know before age 10:

1. Money is Finite – When it’s Gone, it’s Gone:

Research shows that 60% of Americans are spending all or more of their income, which means they are in debt (or about be) and do not have an emergency fund. Kids need to know that once a dollar is spent, you can’t get it back.

In the book, “Smart Money, Smart Kids” by Dave Ramsey and his daughter, Rachel Cruze, they share a great example of learning this concept. (Ramsey & Cruze, 2014) Rachel was a child and had a certain amount of money that she could spend on whatever games she wanted on their trip to a theme park that day. She eagerly started playing the first game she saw and ran out of money within the first 10 minutes of entering the park.

Dave and his wife stuck to their guns and did not give her anymore play money for the day and used it as a teachable moment. Rachel says that lesson has stuck with her for life. It is important that our kids learn these lessons while they are young and the stakes are lower.

If she had never learned that lesson and continued to blow through funds as fast as she received them, managing paychecks as an adult would be more difficult and would result in much more serious consequences.

We have to let our kids “fail” sometimes to learn these lessons early in life while they are in a safe setting. It is also important to understand the concept of opportunity cost. If you buy this, you will not able to buy this/ pay this upcoming bill.

2. Money is Earned Through Working:

Work is a good thing and it’s necessary to make a living. Our kids need to know that we work…to earn money…to buy the things we need… and to live the lifestyle we want. Learning to be a good worker and to have a strong work ethic is probably one of the most important skills kids can learn as it will set them up for a better future.

In your younger years, your ability to earn money is your largest financial asset. We all want to do meaningful work and feel proud of ourselves for a job well done. You can help encourage this mindset by helping them take pride in the chores they do around the house or for others.

Show them the value of what they’ve done and how having that task done well helps the whole household function. Just telling them that you are proud of them for doing a good job will go a long way.

3. Delayed Gratification/Patience:

Having a “Buy now, figure out how to pay for it later” sort of attitude can get you into big trouble. You simply can’t have everything you want right when you want it. The sooner kids understand that, the better. If there is something they want, help them identify the cost, set a goal, and determine a plan of earning money to save up and buy it. Saving up for something special teaches patience and ensures that you actually do want the item/experience.

Many people find that in the process of saving for something, it’s not actually that important to them and they’d rather use their funds for something else. Have you heard of the 24-hour test? If you find something you really want to buy, just wait 24 hours and see if you still really want it.

Once that item is out of sight and out of mind, most find that they didn’t actually want it that badly. Alternatively, the 24 hours gives you a chance to do some comparison shopping, take stock of what you already have that may be similar, or find a coupon for it if you do decide it’s a worthy purchase.

The sooner you start having these conversations and instilling these concepts, the better. Look for teachable moments and fun ways to talk about these concepts. In my book, “Milton the Money Savvy Pup:  Brings Home the Bacon”, Milton learns a few very basic money management concepts. He learns how to identify coins and their value, understands that you earn money by working and that sometimes you have to wait and save to get what you really want. Check it out here: Milton the Money Savvy Pup

Jamie Bosse, CFP®, RFC is a Financial Planner at Aspyre Wealth Partners. For help with your specific situation contact Jamie Bosse at, (913) 345-1881 or visit our website at We help successful people Master What’s Next® – whatever phase of life they are in.