Financial Literacy

You Don’t Need to Be Financially Literate to Teach Your Kids about Money

You Don't Need to Be Financially Literate to Talk to Your Kids about Money | www.TheHeavyPurse.comToday I’m going to debunk another popular myth when it comes to teaching kids about money. I’ve heard multiple reasons why parents can’t teach their kids about money. Usually it is some variation of lack of time, lack of curriculum and perhaps, the biggest reason of all: lack of knowledge. Many parents look at their own financial situation and don’t feel they are the best teacher for their kids. Here’s the truth: You don’t need to be financially literate to start teaching your kids about money. You can become financially literate together.

I understand your discomfort. It’s not always easy confessing our money mistakes to our kids. At the same time, I respectfully say get over it. Sorry to be so blunt, but a little discomfort on your part is a small price to pay when your child’s financial future is on the line. I fully believe one of the biggest factors in our children’s overall financial well-being is their ability to make good decisions with their money. And the best teacher is YOU.

Why Parents Are the Best Money Teachers

I know many want financial education to become a part of our school system, which I would love to see as well. However, regardless of whether or not your school offers such courses, now or in the future, parents will always remain the best teachers. Why? Because our kids are always observing us.

Of course that means we may have to un-teach our kids some things as well. 🙂 The point is teaching kids how to use their money wisely is more than just knowledge or a class for them to pass. This is not an argument against financial education in school. I would love for it to become a core part of our curriculum. It’s a desire for both. Financial education is hands-on and needs to be seen in action, consistently and long-term.

Children need to be taught how to create goals and to align those goals with their values and dreams. The people best suited for this is Mom and Dad. My girls don’t live with their teachers, so they don’t get to see them make daily decisions to honor their goals. They don’t go to the store with their teachers and explain why they choose to spend more for some items and less on others. Your kids look to you to be their money role models.

Never forget you hold the greatest influence over your children. Take advantage of that influence and power to help your kids develop a healthy relationship with money.

Turn Your Money Mistakes into Lessons

Now onto the greater issue—most parents don’t feel qualified to be the money teacher. All they see are their mistakes. Well, guess what? Everyone makes money mistakes. Financial literacy does not guarantee that you will never make a money mistake again. It is not teflon against money mistakes.

Kids become aware pretty quickly that Mom and Dad are human and have made mistakes. I encourage you to use them as lessons for your kids, instead of hiding them. Be honest and share with them:

Again these are not sit-down lectures you need to have with your kids. But stories you share when you go shopping with them or as you coach them to manage their first budget or when you help them set their save, spend and share goals. Kids like to learn about your mistakes, not so they can lord them over you later, but because they know they can turn to you when they make their own mistakes.

Learn and Become Financially Literate as a Family

There is no unwritten rule that you have to be financially literate in order to teach your kids about money. You can learn together. In fact, it can actually be a lot of fun to go on this journey as a family. Sometimes parents tell me they want to wait until they get their finances in order. Again, I understand why they want to do this but strongly encourage you to instead learn together. The sooner you start talking to your kids about money, the better.

We Have this Little Issue Called Debt to Eliminate

As hard as it can be to talk about past money mistakes, it can be downright terrifying to talk about existing money mistakes with our children. I find parents who are the most resistant to talking to kids about money are currently dealing with debt. So how do you handle this? By being honest and upfront.

Consumer debt is a common problem and one that continues to grow. One of the biggest reasons you want your children to become financially literate is to help them avoid unnecessary consumer debt. You may be tempted to wait until after you eliminate your own debt to talk to your kids, but please don’t. Kids need to understand the dangers of consumer debt and can also be your biggest supporters as you work towards financial freedom.

Before you talk to kids about family debt, make sure you have a plan in action or ready to put into action to eliminate your debt. The more uncertain you seem, the more uncertain they will be. You want to appear in control and confident that you can eliminate debt and be crystal clear as to why being debt-free is worth any potential sacrifices you (and they) have to make short-term. For more guidance, please read my series on talking to kids about debt.

Financial Literacy is a Moving Target

Financial literacy isn’t something you ever completely master or really complete. You always learn new things whether it’s a new investment vehicle or a different way to look at your finances. Most importantly, it’s something you can do together as a family.


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Leave a Comment


  1. Wednesday, April 9th, 2014
    Good point about having a plan in place before talking to your kids about debt. The last thing kids need is to be stressed about family finances, as that is something they have just about zero control over.
    • Shannon Ryan
      Wednesday, April 9th, 2014
      I know some people think talking about debt will scare their kids, but the truth is they most likely know something is going on. With that being said, parents should absolutely have an agreed-upon plan in place and present a united front to their kids. When they realize their is a solution in action, it helps eliminate the fear and as you said - they shouldn't have to bear the burden of getting rid of debt.
  2. Wednesday, April 9th, 2014
    You are right on target here Shannon! By default, parents teach kids how to handle money simply by modelling behavior - for good or for bad. Kids pick up on what their parents do (more than what they say). Because of that, parents are the #1 influencer in a child's life, so much more than a school could ever be.
    • Shannon Ryan
      Wednesday, April 9th, 2014
      Glad we're on the sample page, Brian, since I know you teach financial education at school. :) I think teachers can play an incredible role in educating kids about money but the simple fact that kids live with their parents and mimic their behaviors makes them the more influential teacher. And yes - kids really notice what we do and when what we say and do are not in alignment.
  3. Wednesday, April 9th, 2014
    I do think some form of financial education in schools would be helpful, but you're right. The bottom line is: it's your job as a parent to teach your children about money and financial habits. There are lots and lots of other things parents are supposed to teach children too that have been taken over by schools in recent years, like Sex Ed. No wonder why the schools can't keep up with meeting testing results, etc. Now, I am not a parent, so please feel free to take my opinion with a grain of salt. :) Great post Shannon!
    • Shannon Ryan
      Wednesday, April 9th, 2014
      I'm a parent and agree with you! :) I'd love to see financial education in school because I believe it's a subject as important as math, reading, science, etc. However, I still believe parents still need to be the leader when it comes to teaching kids about money because they are the person their kids will model their behavior after.
  4. Wednesday, April 9th, 2014
    I LOVE the idea of learning to become financially literate as a family. I know that as parents we expect ourselves to be great role models to our children, and feeling like a "failure" in personal finance doesn't feel like a great role model, but I think there is no greater lesson we can teach our children than humility and asking for help when we need it.
    • Shannon Ryan
      Wednesday, April 9th, 2014
      I agree, Shannon. It is hard when we feel like a failure but seeing us learn with them really emphasizes the importance of financial literacy. And it honestly can be a lot of fun to do together.
  5. Wednesday, April 9th, 2014
    I like what you said about "debt robbing you of choice". So true! You don't have any choice when you have debt except to pay that thing down. Then, you get the freedom of choice!
    • Shannon Ryan
      Wednesday, April 9th, 2014
      It's one of those things that people don't realize until they are in debt. At first, getting into debt seems like they had choice - to do things they couldn't afford to do - until they realize it was a mirage. Once they work their way through their debt, then they truly understand what financial freedom means!
  6. Wednesday, April 9th, 2014
    Kids certainly see everything you do whether you want them to or not. It's not always fun or convenient to use life situations as money teaching opportunities, but I think you have to. It's hard to explain how you made a mistake without worrying them, but I think the more honest you can be without being negative is the best way to go about it.
    • Shannon Ryan
      Friday, April 11th, 2014
      No, it's not always easy to use life situations where we made mistakes as teaching opportunities but it's important that we do and not pretend that we never made mistakes. You're absolutely right - the attitude in which we share our learnings is key to not scaring or worrying them, but instead letting the lesson shine through by being honest and positive.
  7. Thursday, April 10th, 2014
    I definitely intend to let my daughter know about the problems that the hubby and I have had with debt. I really want to teach her about borrowing money and the impact that this can have if not managed carefully. I'm really hopeful that we can raise her to be financially literate. She's aged 3 now and is aware that money comes through being earned. She herself earns a little money by helping me at home doing some basic chores like tidying her toys or making her bed. When she asks me for things at the shops, I tell her how much money I have with me (I don't often use my card these days) and what we need to buy with it e.g. food.
    • Shannon Ryan
      Friday, April 11th, 2014
      You're doing everything right, Hayley. Teaching your daughter about debt is critical because it's something almost everyone faces in some aspect from mortgage, student loan and/or consumer debt. Knowing when to leverage it properly and when to avoid it is critical. I love that you're already helping her understand money is earned and explaining the "why" behind a "no" when she asks for something. Another critical point that many parents miss.
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    "As a Certified Financial Planner, it is my passion to help individuals and families build a healthy relationship with money. I look forward to helping you raise financially confident kids.” - Shannon Ryan