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More than anyone, parents understand that money doesn’t grow on trees. With school supplies, clothes they grow out of in a month, doctors visits, and toys—raising a child is expensive. But teaching your child about finances is essential to their future success. Not only should parents teach kids the basics about saving, but also about investing, budgeting, interest, and even the stock market.

Teach younger children about money and finances by giving them a small allowance. As they ponder what to do with their weekly riches, teach about allocating saving and spending money. Once they have enough saved from the allowance, teach about stocks that relate to something the child is interested in, like McDonald’s or Build-A-Bear Workshop. For money that isn’t being invested, open a savings account for them, so they can get experience dealing with a bank account.

“A good place to start is sharing the balance of their 529 college savings plans that you are putting away for them. They can learn about the investments you are putting their college money in and watch the balance rise and fall,” explained Richard Kahler at Kahler Financial Group in Rapid City. “I bought my first stocks when I was in 9th grade; my kids were about the same age. They have seen their investments triple.”

As children get older, help them invest some of their savings into stocks in a company that they use. Check its progress with them regularly, so they can monitor increases and decreases. Use this opportunity to teach about concepts like the importance of diversification.

When your children have become teenagers and become employed, help them open a Roth IRA. To encourage saving, consider offering to match your kid’s IRA contributions. Some companies that frequently employ teenagers offer employee stock options, so have your teen be on a lookout for opportunities to invest in their workplace.

Most importantly, lead your kids by example. Even if you’re constantly educating about financial responsibility, your words will fall on deaf ears if you don’t lead by example. Live frugally and be a good financial role model for your child.

“There is no age too young to begin teaching kids the basics about money,” said Kahler. “For example, a toy that is purchased with allowance money that a child saves up provides a foundation for understanding an investment. Is it needed? What is the quality? How long might it last? What is the cost in relation to other similar toys. What options will I give up to spend my money on this? Should I save my money for something else of greater value and utility. Will it appreciate in value or can I sell it and get my money back? Money is the most powerful secular force on the planet. Money skills are 21st century survival skills.”



Secret Millionaires Club is a children’s show that follows a group of kids as they make different business and financial situations. The series was made with help from Warren Buffet, who voices himself and acts as a mentor for the children in the show. This show teaches how to handle financial problems and manage money responsibly. Other episodes feature famous guests voicing themselves, such as Gisele Bundchen, Bill Gates, Jay Z, Shaquille O’Neal, and more! The webisodes are available online.

Utilize books that teach financial responsibility and money management. Alexander, Who Used to Be Rich Last Sunday by Judith Viorst is part of the Alexander book series, and tells about his struggles to manage his money and the consequences of needless spending. Financial Peace Jr. by famous radio host Dave Ramsey will teach kids fun lessons about handling money and how to handle financial decisions. The kit includes stories, activities, and a guide for parents to start the conversation about money.

Three Cups by Tony Townsley and Mark St. Germain teaches personal money management through the story of a boy who separated his allowance into three cups: money to give, save, and spent. This book gives children lessons about budgeting and prioritizing money. Blue Chip Kids: What Every Child (and Parent) Should Know About Money, Investing, and the Stock Market by David W. Bianchi explains difficult financial concepts in an easy to follow way. This book is entertaining and discusses money and investing in 100 bite-size topics. This is also a good book for parent to follow along with and learn more about financial fundamentals.

How to Turn $100 into $1,000,000: Earn! Save! Invest! By James McKenna, Jeannine Glista, and Matt Fontaine is a comprehensive guide for children to learn the basics of earning, saving, and investing through illustrations and engaging writing.


By Kelsey Sinclair