Green Living

How I’m teaching my daughter about Money


Penelope has always had an interest in her piggy bank, putting in change and dumping them out and doing it all over again. But recently it’s clear she now understands that money can buy you things. I am not as bad as some of my friends, (ahem, Lauren!) but I do buy her a lot of stuff when we are out and about. If we are in line at Target and she spies a $3 princess doll and asks for it, I say sure thing, no problem, happy to buy it for you, my love.

I don’t ever want her to grow up with me constantly saying, oh no, we can’t afford that. I don’t want to give her my money issues and junk that I inherited from my parents. I know I am not the only one with money junk– we all inherited beliefs about money from our parents. Some kids inherited the belief that there is more than enough to go around and some kids got the message that there wasn’t enough. I am not quite sure how, because we were far from poor, but I grew up with a deep feeling of lack and that there were not enough resources for me.

I have been working hard to clear my money issues the last 12 years, and I have come a long way in my understanding of how money works energetically and how to attract resources into your life (I talk about this more in my upcoming ecourse so stay tuned and get on my email newsletter if you aren’t already!) but I have also worked hard on learning the simple logistics of budget keeping so that I could instill healthy, smart and realistic lessons and beliefs to Penelope.

I finally get to start teaching Penelope about money now that she is interested in it. Here’s what we are doing:

Peter and I decided that we are not going to do an allowance. In the real world, unless you are trust fund baby, you don’t just magically get money given to you each month simply because you exist. You have to earn it. You have to offer something of value to the world and in exchange energy is given back to you.

We decided that we weren’t going to give her strict set of rules, for example a nickel for making her bed, a dime for doing all her sensory diet activities, etc. But that she could negoiate what she felt like her work was worth (not that I am going to let her decide what she wants and then give it, it will be a true negotiation). We want to teach her how to hustle. And by hustle, I don’t mean take advantage of someone, I mean use all the skills and resources you have available to you in any given moment and create a way to earn a living out of it. That’s hustle. When she’s older we will encourage her to be entreprenuer and step outside our home as a way to earn money by coming up with unique ways to help people and solve problems and in turn be compensated for the value she is providing.

Even though we want to stress the importance of earning money, we want to also instill the lesson of being open to recieving gifts. I want to teach her that the universe is a kind and giving place and that there is a time and a place for giving gifts without having to had to “work” for it  or “earn” it. And that when those gifts come her way, to be gracious and thankful and not feel guilty or undeserving of the gift.

She is saving the money she earns in her piggy bank. When she decides she wants to buy something, we count out the money in her piggy bank and see what the total is. She has to save 10% of the total for savings and 10% for charity, then she can spend what’s left. So lately, when she asks me for something when we are out. I show her how much it is and then tell her how much more she would need to save up to be able to buy it, or yes, she does have enough in her piggy bank and this is how much would be left over after if she bought it and I help her make the decision about buying it. Later I want to spend time teaching her how spending makes her feel. Did she regret a certain purchase? Did it make her feel yucky? Or was it a purchase that brightened her spirit and brought more joy into her life?

And lastly, we want to honestly explain to her how much things cost and how we pay for things. I want to always have open and clear lines of communication with her about our family money. When she is old enough, she will know exactly how much we earn, how much we save and what we spend our family money on. And I think that’s the most important lesson we’ll ever teach her about money, that money is not dirty or secretive, and that even when we don’t have a lot of resources at any given moment, it’s not set in stone, it’s just our present experience and at any moment we have the ability to attract more resources into our life, and that there is nothing we can’t afford, only things where we will have to rearrange priorities and make sacrifices to buy or save up for.

How are you handling teaching money skills to your kid? Are you ever thought about the beliefs about money you may be passing down to your children?

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  • Emily Kidd
    July 25, 2013 at 2:19 AM

    Lord almighty I love your blog. Your honesty has helped me so much. This post for example I read this and say to myself that’s the beliefs I have to! But is that what I’ve been doing? no. Because that’s not how your suppose to. And for whatever reason a certain way was set in my head and I believed it to be best instead of questioning if that is what’s best for my family.
    Your awesome

    Ps if that isn’t an ass kiss comment I don’t know what is

  • Jennifer
    July 25, 2013 at 2:32 AM

    I love your idea of negotiation! So clever! I think I’ll use that when my daughter is older, she’s not even 2 yet. Great post! Thanks!

  • Megan Alton
    July 25, 2013 at 2:45 AM

    Genius! I wish I had been raised around $ in this way.

  • Rachel
    July 25, 2013 at 2:57 AM

    Great amazing article and very well said! Our older children know what we make and I let them see at the store how much things cost. (Groceries ) they know and understand now that you don’t just magically throw something in the buggy and it gets magically paid for. We spend long hard hours working for that item so we have to think is it really worth it. I’m glad your taking this step a lot of parents don’t mine never did. Money was a hush hush subject not to be talked about growin up? Needless to say I spent lots of years trying to figure money out…some days I still do. But, like you said you don’t want to reflect ur bad choices off to them .

  • Kelsea
    July 25, 2013 at 4:40 AM

    I love this post! My husband and I plan to do the same thing with our children. I love that you mentioned talking to her afterwards about how her purchase made her feel. That’s a huge part of introspection and I think is something that could make a huge difference as she gets older and is deciding on how to spend her money. Thanks for sharing this!

    • Stephanie
      July 25, 2013 at 1:08 PM

      Thanks for reading!

  • sarahkeith
    July 25, 2013 at 2:52 PM

    This is a great post, and great food for thought. Our daughter is not yet one, so I have a little time to prepare for these types of lessons. Thanks for getting me thinking about it!

  • cassandra
    July 25, 2013 at 6:05 PM

    This is the one thing I always regret that my parents never taught me about. When I moved out on my own. I had no idea jow to budget and ended up spending time in the library researching. It’s unfortunate that in our school system there wasn’t any information provided about budgeting.

  • Rick Brandt
    July 27, 2013 at 1:46 AM

    Hey, I’m Stephi’s dad. A long time ago when she was about 3 years old, I thought I had a teachable moment about work and money for Stephanie. I had been laid off from my flying job and had recently returned to work. I was picking up extra trips so the bills could be paid. I was leaving for a trip when Stephi said, ” Daddy, why are you
    leaving again so soon?” I replied…..” you know those pudding pops you like so much?” “Yes”, she said.
    ” Well, I’m going to work so I can buy you some more.”…..”Oh…OK… I love you…bye.”
    So I flew a 3 day trip, thinking all the time a had given her some wisdom about hard work and money.
    One night at home and I was leaving again for work. Stephanie saw my bags and my uniform and wailed…
    ” Daddy, are you going to work again?” “Yes” I said. With tears in her eyes, she said, ” DADDY, I DON’T WANT ANY MORE PUDDING POPS!” A 3 year old had nailed it for me. It is not just work , money, things, but family and time together. It was just one of many lessons she has taught me over the years. She continues to amaze me.

    • Stephanie
      July 27, 2013 at 9:12 PM

      Thanks for sharing. I think that time period is where a lot of my money baggage came from. A book I read recently said that between the ages of 3 and 6 is when children unconcsciously download their programing about how to feel about money. So even though you went on to earn a great living, during those financially tough years, I took on all your stress and worry about paying bills.

  • Abbey
    August 7, 2013 at 1:31 PM

    I really love this article! I feel I inherited a ton of bad money issues from my parents as well, and at the age of 27-28 am finally able to sort out what is right; what we ( my husband and I) want for our family. I really like the idea of talking about how purchases make a child feel, and be open about money. Talking about how much people pay for something or how much a person makes has (to me) always Been considered very rude, but I think that when discussed within your own family, you are right, it would be very beneficial for kids to understand. We are a family that can’t afford a lot. So, on the flip side, I have no problem telling my littles that we can’t afford some things….well, many things. I try to do this while reminding them of the abundance we DO have compared to so many. I try to keep it in perspective for myself as much as them. Like, ” sorry honey, we can only afford groceries today, not any extra arts/crafts supplies. Remember we still have lots of fun things at home, and last week we got to have a fun trip out for ice cream.” I try simply to remind them we never go with out. With out a bunch of extras? Yes. Without what we need? Never. Without some fun stuff sometimes? Nope, just not as often as some. Anyways, just what we do here. Thanks for your insights and new ideas 🙂

  • Rachel
    November 25, 2013 at 2:37 PM

    Dave Ramsey’s Financial Peace University is a great program for money management. He has a kids program too. We took the class a few years ago and it changed the way we look at money and debt. We were able to become debt free this year! The philosophies seem similar to yours. It’s awesome.

    • Stephanie
      November 25, 2013 at 2:39 PM

      Yes! Love Dave Ramsey. He is great for the meat and potatoes information about good money management.