3 Words to Teach Your Child Financial Responsibility

We hope to teach our kids lots of life lessons throughout their time with us. Of these lessons, financial responsibility ranks high on the importance list. Kids of all ages will benefit from lessons in financial responsibility. While financial responsibility entails a wide range of lessons, these 3 words to teach your child financial responsibility will narrow the scope. Scroll to the bottom to see my favorite tool for teaching these 3 words.

teach your child financial responsibility

Do your kids know what it means to EARN money? Explain to them that you earn money when you receive money in exchange for effort or work completed. Money gifted to you is not earned. Lots of options exist for kids to earn money from allowance to side jobs to rewards.

So the, we must teach our kids the importance of putting in effort in order to make money. Earning money to cover the cost of that new game they want builds motivation. The reward at the end of hard earned money results in a feeling of appreciation for the effort. Your child will also experience a feeling of satisfaction that comes from working towards a goal and accomplishing it. Experiencing the feeling of appreciation and satisfaction will carry over into the next time your child wants/needs to earn money and ultimately lead to an understanding of what it means to be financially responsible for something. All great lessons no matter your age.


Explain to your kids, to save money means to keep it and watch it grow without spending it right away. If you earn money, but immediately spend it on something, you will never save money and be able to see money grow. Does money seem to burn a hole in your child’s pocket? If so, they might need a visual on what it means to save money and watch it grow. Showing your child a simple math problem of $5 one week + $5 the next week+ $5 the next equals, or grows to, $15 total (5+5+5=15), visually explains saving and growth. Ask them what can you buy with $15 that you cannot buy with $5.

Just as kids should learn what it means to save, another important lesson in teaching your child financial responsibility requires an illustration between a need and a want. So, how do we do this? A great way to illustrate the difference between a need and a want is to get back to basics. Take a piece of paper or dry erase board and draw a line down the middle to create two columns. Label one column “need” and the other “want.” Have your child name things they have, things they don’t have but would like to have and ask your child whether they think that item is a need or a want. Write down your child’s categorization of their things in the need or want columns. Next, discuss each item and whether it truly qualifies as a need or a want, together with why or why not. Then, explain why you spend money on needs first and save up for the wants. Hopefully, this lesson in distinguishing between a need and a want will follow your child into adulthood.

Curiously, most kids will want to know why they have to save. In our family, we explain that you save for various reasons. First, you save for that big ticket item you want, but don’t have enough money for just yet. Second, we save for the unexpected. While kids probably won’t have emergencies to save for, you can explain that mommy and daddy save for emergencies and also explain why. Third, you also save to give…to give to those in need, those that are less fortunate, or give to a cause close to your heart.


Conveniently, that brings us to the third word to teach your child financial responsibility – GIVE. In our home, we emphasize giving. So, our kids know we consistently give to our church and other causes close to our heart. What does it mean to give? We explain that giving shows kindness and compassion. In addition to that, giving means helping others in need. We explain that God blessed us with the ability to earn money in order to support ourselves but also in order to share with those who may be less fortunate.

Remind your child of a time when someone gave them something for no reason, not a birthday or Christmas gift, but just because. Ask them how it made them feel. Share how great it feels to give someone else something just because. Share how we honor God by helping others expecting nothing in return.

Help your child make a list of causes or organizations they would like to help. When your child takes an opportunity to give to a cause, talk about it, ask them how it feels, and make sure to identify all the ways the money given by your child helped that organization or cause. Teaching your kids how great it feels to give fosters a true sense of generosity that will last a lifetime.

Teaching Tool

Teach these 3 words: earn, save, give and teach your child financial responsibility. My favorite tool to implement these financial responsibility strategies with kids is the Greenlight Debit Card. Greenlight makes earning, saving and giving so simple. The app has a feature to set chores and money earned for chores. It then provides the opportunity to designate a percentage that automatically goes into spending, saving and giving. My kids allocations are set up as 50% for spending, 25% for saving and 25% for giving. At the end of every year (or more frequently if they wish), they choose a non-profit to donate their giving portion.

A really fun feature of Greenlight is the personalized debit card. Each of my kids picked a favorite photo to put on their card. Here is a picture of my daughter’s with our sweet black lab on the front.

I hope this post gets your kids off to a great start towards learning financial responsibility.

XO, Christy

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