What Can Happen If You Don’t Teach Your Child About Money

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Teach Your Child About Money

I grew up in a time in life when the concept of “Teach Your Child About Money” was pretty much non-existent.  My parents never talked about money with us, nor did their parents talk with money about them. Luckily, things are changing on this front as parents are told that its okay to teach your children about money.  It’s amazing what can change in just one generation. 🙂

I still think we’ve got a long way to go, but a growing number of parents seem to be more intent these days in talking with their children regarding money lessons they’ve learned, and that’s a good thing. However, there is still a segment of the population that seems hesitant to share money tips and information with their kids, so I wanted to give people an idea of some of the behaviors and thought patterns that can result when you don’t teach your child about money.

To Fight Fear, Teach Your Child About Money


I know a guy who grew up in a household where there was always an underlying fear about not having enough money.  Now, from a strictly monetary standpoint, this guy’s family was doing fine.

They had a decent income and very little debt.  However, for some reason his parents had given into the fear of not having enough money, and so he took this fear on, even though finances were never officially talked about in his home.

The result? The guy hoarded money like a squirrel saving for a perpetual winter, fearful of even buying basic things like socks and underwear. His parents’ subliminal messages in their passing comments to each other had given him the illusion that money accumulation and management was out of one’s control.

It’s important when you teach your child about money that they understand the fact that earning and spending money is largely within their control. This concept will help kids relieve some fears they may have about not having enough money.

Fear of Not Having Enough Stuff


On the other end of the spectrum is my story. Money was always tight in our family, and although I never knew just how tight, or why money was tight, I did know one thing: providing even the most basic of needs was often a struggle for our family.

However, instead of growing up to hoard money, like the guy I mentioned above, I grew up needing to make sure I could always buy the stuff I needed – or even wanted – even if that meant using credit cards to do so.

Obviously, this didn’t bode well for our family finances, and between my husband’s incorrect mindsets about money and my incorrect mindsets about money, together we created quite a mess. It’s crucial when you work to teach your child about money that they understand that “stuff” does not mean success or security.

Not Understanding the Importance of Good Money Management


It’s vitally important when you teach your child about money that you teach him or her why it’s important to manage their money well. Share scenarios about what can happen when they: want to make an expensive purchase, want to make a job change, want to make a move to another house, city or state, or when they might need to cover expenses for an unexpected emergency or repair.

Children need to understand that money is a useful tool when it’s managed well, but a hard taskmaster when it’s managed poorly.

To teach your child about money involves helping them see that while money is your friend, poor money management can make money your enemy real quick. Teaching kids even the basics of balancing and tracking income and expenses can give them a concrete understanding that you only spend what’s in your account and that you never live beyond your means.

There are, of course, many more things that you can teach your children about money, many of which will be highlighted in my newly released e-book entitled How and When to Teach Your Kids About Money. However, if you start with teaching your kids the three basic steps listed above, you’ll give them a head start in the area of healthy money management.


What concepts about money did your parents teach you that you are grateful for?  What do you think is an important concept to teach kids about money?


Photo courtesy of: Tax Credits

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Laurie is a wife, mother to 4, and homesteader who blogs about personal finance, self-sufficiency and life in general over at The Frugal Farmer. Part witty, part introspective and part silly, her goal in blogging is to help others find their way to financial freedom, and to a simpler, more peaceful life.


  • DC @ Young Adult Money says:

    I would definitely say something that affected me growing up was my parent’s saying we can’t afford certain things, and leaving it at that. I plan on telling my children WHY we can’t afford things or why we are choosing not to spend money on certain things. I think it’s an important distinction and just saying “we can’t afford that” can have negative effects on children.

    • Laurie @thefrugalfarmer says:

      I love that idea, DC, and you’re so right about those words having a negative effect if you don’t tell the kids why. When the kids understand that you are choosing to use your money differently instead of just saying “We can’t afford it”, it puts a whole different perspective in their minds. Great comment!

  • DEBt DEBs says:

    My parents were never willing to share my Dad’s salary – it was a taboo subject. But quite honestly I think it is because they were afraid I’d blab it to my friends who would tell their parents, who were also friends of my parents. I think it was part of the keeping up with the Joneses mentality and my Mum had it bad.

    Ahem, but you asked what concepts about money did your parents teach you that you are grateful for. For me it is this: my parents were pretty frugal and I thought that we were at the bottom level of middle class. We had to drink powdered milk as kids because regular milk was too expensive, my Mum said. However, they invested in property and investments, having a home down south and a cottage.

    I see now that they were very wise in this regard. We were even able to drive down south for three years in a row for Christmas to stay in their property. It was then I started to see the benefits of their frugal living. OK, my Dad may have been a bit more frugal, as I remember Mum accusing him of being a miser, but he is self-sufficient and managing very well now at 89.

    Despite my Mum passing away at 73, I don’t want my kids to have a must-have-it-now mentality. The joys of saving and planned spending for what you really want to spend your money on are much greater than the immediate gratification which dwindles or dissipates quickly.

    • Laurie @thefrugalfarmer says:

      The last line in your comment spoke volumes, Debt. Saving for what you truly want really is a joy, and as you showed with your story, has tremendous benefits when done right. Thanks for sharing a great story.

  • Stefanie @ The Broke and Beautiful Life says:

    My parents didn’t teach us anything directly but they modeled important values. One of the big lessons was to value experiences more than things. I’m from a very well to do town and every kid had a car, ipod, laptop, etc (this is before all the tech become ubiquitous too). We didn’t have any of it, but we were never deprived. We took the bus and used the payphones at school for emergencies but we also got to take amazing trips every year as a family.

    • Laurie @thefrugalfarmer says:

      Sounds like your parents did a terrific job of instilling the “experiences over things” mentality into you guys, Stefanie. What a blessing! Our kids don’t have much in the way of “stuff” in comparison to what most kids have, but they also are very grateful that we are choosing financial security and good experiences over stuff. That gift is starting to really mean a lot to them; more than any material item ever could.

  • Liz says:

    My parents were big on saving and I think they did a good job teaching us how to save and why it’s important. I think one thing my parents really struggled with was enjoying their money.. they had a hard time treating themselves though I think they’ve gotten a little better over time : )

    • Laurie @thefrugalfarmer says:

      That’s terrific that your parents taught you how and why you should save. That seems to be a lost art in today’s world. Thanks for sharing, Liz!

  • Retired by 40 says:

    I too, grew up in a family where basic necessities were always a struggle. As I got older I realized that the lack of money was due to my father’s poor work ethic (he was self-employed) and the fact that he would not allow my mother to work outside the home. While I hated this growing up (and still do, for my mother’s sake), I affected me positively. I got my first job when I was 14, and the whole situation taught me the value of money as well as an excellent work ethic. my mother taught me to be frugal, for which I am also grateful. I can only hope that my financial decision and the financial climate around our house will provide what our daughter needs to have a healthy relationship with money.

    • Laurie @thefrugalfarmer says:

      It certainly sounds like you’re on the right track! A strong work ethic is SO important, especially in today’s world. And combining that with the knowledge of how to manage money properly is definitely a winning combination. Thanks for sharing your story. πŸ™‚

  • Michael Solari says:

    I remember that a bank had partnered up with my elementary school for kids to open up accounts. My parents would give me a little bit of money to deposit and it was actually a cool feeling. I’m definitely a saver and love when my account grows. The only thing I wish I was taught was to be a better negotiator. I just started negotiating things for my business and I feel like I’ve missed out on a lot of opportunities.

    • Laurie @thefrugalfarmer says:

      Yeah, that’s something we were never taught either. We were always simply taught that whatever “the man” says, goes. We too are now learning of the value of being a good negotiator, and it’s really changing things for us. Thanks for sharing, Michael!

  • Dee @ Color Me Frugal says:

    My single mother was never all that great with money. She often carried a credit card balance and in later years has developed a penchant for expensive automobiles, always financed of course. I sort of grew up with a “buy whatever you want whenever you want it mentality,” but luckily I married a very frugal guys who’d had a totally different upbringing, and over the last ten years or so he’s pretty much transformed me. Thank goodness I met him! Parents are always teaching their children about money whether they recognize it or not.

    • Laurie @thefrugalfarmer says:

      Sounds like us, Dee! Rick too, grew up with a very frugal mindset due to seeing his parents struggle with money. For a long time, I didn’t “get it” and he wasn’t willing to stand up and have a voice about our money, but eventually we both learned to be smarter and stronger, and often times now I’m more frugal than he is. πŸ™‚

  • Amanda @ Passionately Simple Life says:

    My mom rarely talked about money, but she showed me a lot of her habits, which I greatly appreciate. She showed me what it was to get the best deals and that the end result was that we used less than what we had planned. I would love to incorporate a lot more talking and explaining when it comes to money than my mom did, but to live by the rules we lay down.

    • Laurie @thefrugalfarmer says:

      Sounds like you’ve got a smart mom, Amanda. We do LOTS of talking with our kids about money too, and it really does work. Kids learn to understand the “whys” behind the money management decisions, and that enables them to see the big money picture. Thanks for sharing your story. πŸ™‚

  • Andrew@LivingRichCheaply says:

    It is definitely very important to teach your child about money. I think the best way to teach them is by example and by being a good financial role model. Though that alone may not be enough. I think I’m frugal because I learned it from my parents, but many kids I know who had frugal/cheap parents who didn’t grow up with much spend now to make up for the past. You also have to explain things to the child as you mentioned by sharing scenarios, explaining the consequences of money decisions and how to track your money.

    • Laurie @thefrugalfarmer says:

      That was a lot of what I did, Andrew, because, like you mentioned, money wasn’t explained to me. You’re right on the mark when you say both the modeling and the explaining are very important.

  • E.M. says:

    I do have a fear of not having enough money due to what my parents went through when I was younger. I knew they were in debt, but all I knew is that we couldn’t afford things, and we came close to losing the house. They were constantly stressed out about money and unfortunately that attitude has been passed on to me. I know I have enough to cover me in case something happened, but I always fear the worst will happen. It’s really important to explain things to kids even if you think they won’t fully understand. They do pick up on things!

    • Laurie @thefrugalfarmer says:

      Your story is a great example, E.M. Rick grew up in a similar environment and has such fear about money now. It’s amazing how much those childhood experiences affect us as adults, isn’t it?

  • Raquel@Practical Cents says:

    My mom was a widow raising six children. I don’t know how she did it as she never remarried. She had my fathers social security to get by and public assistance to supplement that. She also took care of other kids for extra money. She never really had major debt and she never borrowed money from friends or family. When she needed money she went to the bank and I assume she had good credit because she was able to get small loans and she always paid back in time. I think the biggest lesson from her was to be responsible and whatever little money you have manage it very well.

    • Laurie @thefrugalfarmer says:

      Wow, Raquel, you are lucky to have such an amazing mom – wise and strong both! Thank you for sharing your story. Your mom proved that even a small amount of income can be managed wisely.

  • Shannon @ Financially Blonde says:

    I am with you Laurie, my parents never spoke to me about money and smart money management, but I know now that it was because they didn’t really know what it was. And I definitely made a lot of money mistakes because I did not have a good foundation. The good news is that I am not continuing that “family tradition” and my son gets financial lessons on a daily basis (whether he likes it or not). πŸ™‚

    • Laurie @thefrugalfarmer says:

      LOL, yeah, Shannon, we’re pounding those same wise money lessons into our kids’ heads too. But I know they’ll thank us for it when they grow up. πŸ™‚

  • Ryan @ Impersonal Finance says:

    In my early 20s, I was a prime example of what can happen when a child isn’t taught about money. I saved too little, spent too much, and generally speaking, was just in way over my head. We always had one of those families where money was tight because the second we got any, it seemed to go out the door. I’d much rather keep the money in my hands than making someone else wealthy, and I plan on teaching my kids plenty about money early on in life so they don’t have the same issues I did.

    • Laurie @thefrugalfarmer says:

      Ryan, your family life and younger years sound LOTS like mine. Isn’t it nice to know better now, and to have a plan in place to teach our kids to do the same? πŸ™‚

  • Shannon @ The Heavy Purse says:

    You already know how important I think it is to teach kids about money. As I’ve shared before everyone handles money and we must teach our kids how to make good decisions with their money, just as we teach them to read and write, say please and thank you. The ability to make decisions that align with their values and goals, rather than emotional decisions is one of the best gifts we can give our children.

    • Laurie @thefrugalfarmer says:

      “The ability to make decisions that align with their values and goals”. Shannon, that’s one lesson I learned from you that I am so very grateful for. It made me start to think about NOT spending money as a blessing and not a punishment. Thank you for that. πŸ™‚

  • anna says:

    How exciting about the e-book, Laurie! I grew up with the same premise as you, where money was more associated with stuff and making sure there was enough to pay for it, even if it means with credit cards. I for sure don’t want to raise any hopeful kids like that, nor like your other example so that they live in fear, but more a happy medium. Great points!

    • Laurie @thefrugalfarmer says:

      Yes, that’s what we’re going for as well, Anna. I just want our kids to understand that money is a tool, and that life is a lot happier when that tool is used safely and wisely. Thanks, Anna! πŸ™‚

  • Marvin says:

    We were never taught anything about money really. The only thing we received was an allowance which was good helping me manage money. As far as our children, we will talk about money at the dinner table and quite frankly every other chance that we get. We plan to implement an intricate reward system that encourages savings.

    • Laurie @thefrugalfarmer says:

      Good for you guys, Marvin. We are working to do the same. Here’s to mentoring the next generation to be awesome money managers and stewards of what they have.

  • Dianne says:

    My parents never shared money issues with us kids, because they simply felt it was none of our business. They lived from check to check their entire lives, never gave us an allowance, and never talked about saving our money.. I remember once, when I was 17 years old, I simply asked my mother “What does it take to run a household? What kinds of bills are involved?” Like utilities, taxes, medical. insurance, groceries, etc. She got very angry and accused me of trying to snoop into “their business”, so I dropped the subject.
    These basic principals need to be taught to kids, so when they step out in the world, the know what they are facing.

    • Laurie @thefrugalfarmer says:

      Wow – talk about a closed door there! πŸ™‚ And I totally agree, Dianne; it is crucial that our kids learn what they will face when they step out into the world. We certainly don’t want them learning on their own like I did. πŸ™‚ Great comment, Diane. Thanks for sharing!

  • Keith says:

    Didn’t learn much about money management, despite coming from professional parents. Learned about savings only when I got a job while in high school.

    • Laurie @thefrugalfarmer says:

      Keith, you had the savings thing down – that’s more than most people. Good for you. πŸ™‚

  • Dude says:

    Those really are some of the consequences if parents don’t teach their children how to value money and manage it properly. Great article Laurie!

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