By Dr. Disha Spath, WCI Columnist

He was absolutely ecstatic. I watched with amusement as my 7-year-old son bounced around the kitchen island with his hands up in the air, a big smile on his face, yelling “I’m financially free! I’m financially free!” I couldn’t believe it. At 7 years old, this kid already got the concept that took me so long to learn. I can’t even imagine all the places he will go from here.

How did my 7-year-old understand the concept of financial freedom? Well, I gave him the Cash Flow Quadrant board game by Robert Kiyosaki, the writer of Rich Dad, Poor Dad, for Christmas. I love this game because it depicts what happens to money in real life so well. All players start with many fixed expenses and some income. As the game progresses, the players can choose to buy assets (or take on liabilities that increase their expenses). If the player chooses correctly, their assets start to generate income. Eventually, passive monthly income surpasses monthly fixed expenses, and the player wins by being . . . you guessed it . . . “financially free.”

It so accurately represents how one can either increase income or decrease expenses or both to quickly reach financial independence. As a negative, this game doesn’t really incorporate stock market or retirement investing in the game, which is in keeping with Kiyosaki’s leaning toward investing in real estate and intellectual property. But it teaches a difficult real-life concept of cash flow to young kids in a surprisingly expedient fashion.

Teaching my kids about money has been a personal mission. My grandmother used to do the same for me, although I was closer to 12 years old. In India, my grandfather was the Deputy Collector (financial official) of the town, but everyone knew my grandmother was the real accountant of the family. She knew where every dollar was invested and how much we owed and to whom. As I grew up, she would often sit me down with a cup of chai on a pair of wicker chairs in her kitchen and tell me all about it.

I got the feeling she was trying to teach me, and I am passionate about doing the same for my kids.

My husband and I had a chat about how we’d like to approach teaching our kids about money. Both of us were on the same page that we wanted them to get started early with financial education. We also hoped we could instill in them an appreciation for the value of money and, ideally, gratitude for how privileged they really are.

Here are some of the ways we try to teach our kids about money.


#1 Teach Them the Value of Money

My first mission was to help them understand the value of money. My husband and I made a chart of chores and assigned a dollar value to each assignment. I understand this may seem like a controversial thing to do, as people often say kids should do chores out of duty. But hear me out.

I want them to understand that to earn money, they have to work initially. The money they earn can be saved, spent, donated, or invested. Just like the real world. After all, we all work for money. Many of us have to learn, much later in life, how to advocate for our worth and our time. I’d rather have my kids learn the value of their time and efforts and how to advocate for it now, instead of doing things out of a sense of duty.

As a result, my older son woke me up the other day with a request to assign him some chores.

“What?” I asked with sleepy eyes.

“I want to do chores.”

I thought I must still be dreaming, but no, I was verifiably awake. “OK . . . but why so early?”

“I need money to buy books at the school book sale,” he replied. “I know what books I want, and they cost $3. What can I do to earn $3?”

I smiled and gave him the chores he asked for. I couldn’t have been prouder.

The boys know that we will cover their needs and give them ample gifts on special occasions. But they also know that if they want a toy outside of birthdays and Christmas, they need to save for it. I gave them piggy banks and wallets to save and carry their cash. Once they have enough for the toy they want, we go shopping. It’s fun to see them making choices and doing the math to stick to their budget in between the Target aisles at 5 and 7 years old.

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#2 Teach Them the Concept of Investing

Part of the deal of them earning money is that I provide them with a “mommy match” into their UTMAs. We started Acorns UTMAs for them a couple of years ago due to the ease and general kid-friendly appearance of the interface. Whenever they earn money, I deposit the same amount in their UTMAs. It’s easy to make small deposits into ETFs, and it’s easy for them to see which companies they are invested in. They understand that they own a piece of each company they buy a share in and that those companies are hard at work to make them money. They can see the future value of their money when they turn 21.

I haven’t shown them their balance recently, though. I’m not sure they’re ready for a lesson on bear markets just yet.

Another way we teach them about investing is by taking them with us when we are working on our rental properties. They have painted many walls with us, and they know that, while we own the house, we let other people live in it and that those people pay us rent.

teaching kids about money


#3 Teach Them the Importance of Giving

Instead of only writing checks to charity, I prefer to donate in person. I want the kids to see and experience the joy of giving and to understand what we are doing. It is amazing how empathetic kids can be. Every few months pre-COVID, we would go and cook a meal for the kids at the Ronald McDonald House in town. It was a great way to teach the kids to give in an environment that was comfortable for them, as well.

Now that we are all fully vaccinated, we hope to get back to it. We also practice giving by donating toys that the kids have grown out of, though this is a bit tougher for them.

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I’m excited to see the progress my 5- and 7-year-olds are making. I can see them absorbing the lessons—whether it's winning financial freedom in a board game or waking up extra early to do chores—just like I tried to do on the wicker chair in my grandma’s kitchen. And I am honored to carry on the tradition of financial education that my grandmother imparted to me. I’m truly amazed to see how easily and early kids can understand the concepts of money that we have such a hard time grasping as adults.

While I’m sure they’ll grow up and make their own mistakes, just like I did, I hope some of these lessons will stay in the back of their minds and will guide them in their time of need.

What are some of the money lessons your parents taught you when you were a child? If you have children, how have you taught them about money? Any other tips and tricks? Comment below!