5 Simple Money Concepts for Kids

By Sunny Istar Lee, Certified Financial Coach

Children are like sponges, absorbing knowledge and information from those around them. Money can be a complex concept for many people, including young children. However, if parents teach their children simple money concepts from an early age, young minds can begin to see money as a more positive tool for success and begin to develop healthy money habits in their lives. Here are five tips I wrote in my book, “Is Your Child a Money Master or a Money Monster?” which I often shared with my children as they grew up.

1. MONEY IS A VEHICLE TO MAKE OUR LIVES COMFORTABLE

Money is an instrument, not the purpose or the ultimate goal of our life. Just like a car takes us from one place to another, money can take us from where we are to where we want to be to have a great life. It is crucial for our kids to understand that money is earned, not given. In order for them to earn money, they first need to work. Young children can do many different age-appropriate chores, and they can start saving and investing what they earn to prepare for their future.

2. THERE IS ENOUGH TO GO AROUND FOR EVERYONE

Do you teach your kids that money is abundant? Some people may say, “There is too much money in too few hands.” but that money mentality comes from a perception of scarcity, not abundance. Consequently, kids can copy and imitate our thinking. Therefore it is important to teach them that there’s plenty for everyone who works hard and works smart, and manages money wisely. We should always speak positively about money!

3. MONEY IS GOOD AND USEFUL

Is money good? I really wanted to drill into my son’s minds that it is GOOD to have money-lots of money. Money is not evil, but the love of money is. It can help family, friends, community at large if we use it for the highest good of all concerned. It isn’t the money itself that determines whether it is good or bad, but the person who decides how to get the money and what to do with it. Our thoughts become our realities. Because possession of anything first begins in our minds and thoughts, we need to plant the right kinds of seeds in our children’s minds if we want them to achieve great financial success and to master wise money.

4. WE BECOME RICH BY ADDING VALUES TO OTHERS

The late motivational speaker Jim Rohn famously said, “We get paid for providing value to the marketplace. It takes time to bring value to the marketplace, but we get paid for the value, not the time.” Likewise, when we add more value to more people, we make more money. Less value equals less money. Teach your children that they don’t get rich by stepping on other people’s toes. But it’s by helping others to get what they want in life. We are paid by value, not by time.

 5. SHARE MONEY WITH OTHERS

To help our children understand this concept, we must first be a role model for them. We must follow our words and keep our promises. Parents are the most influential role models for their children. In the financial sector, I have met many generous millionaires who love to donate and share. They make a big difference in this world. As of 2015, there were approximately 7 billion people in the world, and total global wealth was over $60 trillion! We have more than we can share with others. If we become generous givers, our children will follow our example.

Cultivating these kinds of sound money principles in our children’s hearts and minds won’t happen overnight. Like a seed, it takes time to germinate, sprout, grow, and bear fruit.

You may feel inadequate to teach these important life skills to your children. However, if you love your children, you are more than adequate and qualified.