Children and Money

Part 2: Additional Money Skills Kids Need to Learn Before Leaving Home

Essential Money Lessons Children Must Learn Part 2 | www.TheHeavyPurse.comIn Part 1, I shared 6 essential money skills children need to learn before they leave home. This doesn’t mean that they won’t discard the advice or never make a money mistake, but they will have the tools and experience to make good money decisions. It’s an incredible advantage and has a direct impact on their ability to create the life they want for themselves.

Even if they rebel initially, it doesn’t mean your hard work was for nothing. Eventually, they will hear your voice reminding them of the importance of making good decisions at some point. It has been years since my own money lessons with my father, but I can still hear him telling me to a value-based or an integrity-based decision when I find myself struggling with a money choice. I’m sure many of you can relate and the same will eventually happen with your kids too.

Money Skills Children Must Learn Before Leaving Home

Today, I’m going to share 5 additional money skills you need to teach your kids before they leave home.

7. Understand Debt

You’ll notice that I said “understand” versus “avoid” and that was a deliberate choice on my part. I’m not entirely sure if debt is completely avoidable as many of us will incur debt buying a home, attending college and/or starting a business. Now many consider those types of debts to be “good” whereas consumer debt is “bad”. Maybe. The truth is all debt, whether it is your mortgage or a shopping spree, has risk that needs to be assessed.

I instead advocate that you teach kids what debt is (borrowing and paying back with interest) and what happens if you take on too much debt (the risk debt carries and what happens if you default). Give them a balanced approach so they understand when leveraging debt may be appropriate and when it’s not. To know how to assess the risk to make sure it’s not only reasonable but worth it to them.

When parents hammer the need to avoid debt at all costs to kids, it’s often a result of their own debt and the work they had to do to eliminate it. I certainly understand their passion and their fear of their kids repeating their mistakes. And that is also why I suggest you help them to instead understand debt, rather than fear it. Fear is often a stopgap measure, while knowledge is real power.

8. Respect and Properly Use Credit Cards

Many people fall into credit card debt because they offer an easy way to extend their lifestyle and give them the freedom to do what they want. But that freedom is an illusion. First and foremost, make sure your kids understand that living within their means refers to learning how to live well on the money they earn, which does not include their credit cards.

If you had or have consumer debt, share with your kids what caused you to initially live beyond your means. Did you assume credit card debt was normal? It is likely they will have people tell them that repeatedly throughout their life, so make it clear that while many people do have credit card debt, it should not be considered normal and thus safe. Or were you an emotional spender? Trying to playing keep up? Now share with them what opened your eyes to the dangers of credit card debt and explain how it actually robs them of their freedom.

Survival Skill Tip: The lure of a credit card is going to be high, even if you taught your children to use cash responsibly. My plan is to give my girls a credit card (with a very low limit) when they are in their teens, so they can learn to use them and make mistakes while I can still help them. It’s always easier to create good habits, then it is to fix them later.

9. Be Investment Curious

One of life’s great ironies is when I talk to 20-year-olds who think saving for retirement and investing is something old people do, like their parents. And when I talk to people in their 40’s and 50’s, one of their biggest regrets is not investing in their 20s. 🙂

Your kids don’t need to be Warren Buffet when they leave home but they should be eager to start investing, rather than intimidated or confused by it. So when they receive their 401k enrollment paperwork at their first job, they eagerly sit-down to fill it out and even call you for advice, rather than ask the HR person what a 401k is. Most importantly, they know sacrificing a couple nights out with friends for the money to invest in their goals, is worth it.

Survival Skill Tip: Play an investment game with them. Have them choose a stock to buy hypothetically and follow it. Let them experience market volatility and investigate whether they should buy, sell or hold. Also focus on emotions because knee-jerk reactions are often the biggest mistake investors make.

10. Avoid Playing “Keep Up”

This mindset or habit coupled with using credit cards as a lifestyle extender, causes so much trouble for many people. Kids often learn they need to “keep up” from listening to their parents and other loved ones either complain about others having more or gloat about having more than someone else does. I know this doesn’t paint a pretty picture but those keep up urges are not solely fueled by the media. Truthfully, I don’t think many people realize they even do it.

The best defense against playing keep up is:

  1. Assess your behavior to make sure you’re not teaching your kids that they need to keep up with others to prove themselves.
  2. Know what you truly want, without caring what others think, then set goals to create your ideal life.
  3. Practice gratitude and focus on what you do have, and not what you don’t.

Teach your kids theses rules to help prevent them from getting caught in the game of Keep Up. To create a life they want, full of the things that make them happy.

11. Run a Household with Confidence

Whether your household consists of 6 or 1 or anything in between, it needs to be run with confidence and like a well-oiled machine. I am surprised by the number of kids leaving home today without these skills and it costs them money.

How to Cook

Your child doesn’t need to become a gourmet cook, but they should be able to make healthy meals on their own. Dining out should be a privilege, not a necessity. Invite them into the kitchen to cook with you and teach them how to make some of their favorite dishes themselves.

Meal Plan

Meal planning is a great way to keep your grocery budget under control. Teach your kids how to plan meals around what’s on sale and in season. Have them help you plan meals and educate them on the cost of food waste. Even if we stay within budget, but throw out 25% of our food costs, we are throwing away money that could be used on other things.

The Value of Comparison Shopping

Thanks to the Internet, comparison shopping has never been easier. And it can save you a small fortune too. Don’t let your kids get in the habit of automatically paying full price. Teach them to do some research, read reviews and compare prices. This is also a good place to talk about quality versus quantity. Sometimes quality does trump and other times it doesn’t. Help you kids be able to identify when paying a premium makes sense and when it doesn’t.

Do Their Laundry

Seems like such a basic skill, but you’d be surprised how many kids have to ask someone to show them how to wash their clothes at college. I suggest you instead make sure your child is a laundry pro so they can tutor and charge their fellow classmates to show them how to do laundry without ruining their clothes.

Paying Bills

I already touched upon this, but college tends to act as that bridge from childhood to adulthood. They will pay some bills in college but most likely fewer than they will once they are truly on their own. Sit down with them and open up the books. Let them see what you pay in rent/mortgage and all your other bills. It is an incredibly eye-opening experience for most kids. They had no idea that there are so many bills to pay and what things cost.

Spell it out for them so they see the money that automatically goes towards your savings/investment goals, such as retirement, their college savings plan and other important goals and your bills, including insurance, utilities, cable, etc. They will be surprised by how little is left after you pay bills and fund your goals, which is why you are so careful about how you spend your money.

Home and Car Maintenance

Because your kids are likely years away from home ownership, you can keep it very basic. I do suggest that as you have them help you do chores that you remind why you do those things. They may think it’s punishment, but mowing lawns, cleaning gutters, etc is part of being a homeowner. As they are likely to have a car before a home, you should be very specific about when they need to get an oil change, rotate tires, etc., especially if you took care of those things when they lived at home.

How Do I Teach My Kids These Important Money Skills?

It can be a bit overwhelming and parents don’t always feel as though they are the best teachers, but you are and you can do this. On Friday, I’ll give you some pointers on how to talk to your kids and common mistakes I see.


The Heavy Purse Store is now open! My new downloadable Money Club Workbooks are now on sale. Each workbook provides five targeted lessons to help you raise Financially Confident Kids. Please check them out in The Heavy Purse Store.

October 1, 2014  •  29 Comments  •  Children and Money

Leave a Comment


  1. Wednesday, October 1st, 2014
    Amazing Shannon. I just read the Parts 1 and 2. My best practice when teaching finances to my kids is that I am always open to whatever concern they have. I ask them how much money they save and for what it is for. Then, I just give them encouragement, advice, and support to build their perseverance and commitment. By the way, I look forward to reading your post on "how to talk to your kids...."
    • Shannon Ryan
      Thursday, October 2nd, 2014
      Thanks, Jayson! That's a great attitude to have with your kids. They know they can come to you and talk about money, which is so important. I have an open door policy with my girls and I am probably a little too eager to talk money with them. :) I hope I can do justice on part 3 for you!
  2. Wednesday, October 1st, 2014
    This is awesome Shannon! I love your point that we as parents can do this. I think many can over think this and just think it's too difficult or it can't be done. I understand that feeling, but at the end of the day it's only a feeling. Instead, I like to look at it as being purposeful with your kids and taking those opportunities to bring them in on what you're doing. That will allow you to teach them naturally and less overwhelming to you as the parent.
    • Shannon Ryan
      Thursday, October 2nd, 2014
      Thanks, John! I agree - parents over think this and scare themselves. Being purposeful with your kids is a great way to look at it. There are so many opportunities to naturally talk to your kids and it's an easy way for you to impart wisdom without it seeming like a lecture.
  3. Wednesday, October 1st, 2014
    #11 is so vital to us that we are incorporating it into our homeschooling curriculum during the high school years. I had so many friends when I was a young adult that had no idea whatsoever how to clean a house or make basic meals. I want our kids to be prepared! Great post, Shannon!
    • Shannon Ryan
      Thursday, October 2nd, 2014
      That's a great idea, Laurie. So many kids leave home unable to take care of their basic needs, like cooking and doing laundry, which is crazy.
  4. Wednesday, October 1st, 2014
    These are all great skills that children definitely should learn before they move out. Sadly, I know far too many people who don't have a grasp whatsoever on these areas and it just makes you wonder.
    • Shannon Ryan
      Thursday, October 2nd, 2014
      With the rise in Snow Plow and Helicopter parents, it's becoming increasingly common for kids to leave him unprepared to take care of themselves. I'm all for giving your kids a good life, but that also means equipping them with the tools to succeed on their own.
  5. Wednesday, October 1st, 2014
    I hope I can successfully brainwash my children into staying out of debt and never getting a credit card. If I can do that, I'll be a proud mama.
    • Shannon Ryan
      Thursday, October 2nd, 2014
      I'm sure you'll be a great Mama to your kids and teach them to be financially confident, like you.
  6. Wednesday, October 1st, 2014
    I think reframing concepts like investments as games can help get kids engaged. All great skills to know!
    • Shannon Ryan
      Thursday, October 2nd, 2014
      Thanks, Stefanie! Yes, investing can be dry to some (not to me, of course!) and turning into a game really helps.
  7. Wednesday, October 1st, 2014
    I love that you mention that there is good debt and bad debt and the importance of educating our kids about the differences. I think frequently, especially in the pf community there is unwarranted negativity to debt in any of it's forms; however, I believe that debt serves a purpose and can be used strategically for overall financial health, but there are definitely limits to it's usefulness and it's important to balance it properly.
    • Shannon Ryan
      Thursday, October 2nd, 2014
      There is a lot of negativity towards debt in the PF community and it's understandable as some have spent years eliminating it. But I think debt is something almost everyone will experience and need to understand what debt truly is, rather than labeling it. Debt is debt. Good debt can go bad. And bad debt is not good. :) Fear is such a powerful emotion and I don't want emotion guiding my decisions, but sound judgement.
  8. Wednesday, October 1st, 2014
    #8 can't be understated. My Dad gave each of us a credit card to pay for gas in our car (we went to high school 17 miles from our home - totally worth it btw if that commute sounds insane for a high schooler haha). I learned how to use it responsibly and have never had issues. My sister did start charging other things and got it taken away. But it's better to learn when you can track your kid's spending than wait until they get to college when things are less stable and it's easier to make mistakes.
    • Shannon Ryan
      Thursday, October 2nd, 2014
      That's a great lesson your dad taught you, DC. And why I think it's critical that instead of telling our kids credit cards are evil, we show them how to use one responsibly. Remind them that it's a privilege that can be taken away if abused. Because when you leave home and see all your friends have credit cards, you'll assume Mom and Dad were nuts and get a credit card anyway.
  9. Wednesday, October 1st, 2014
    Household skills are so important, and I'm glad you included them in your list. We don't always think about those in association with finances, but if you can learn to do cook and do basic cleaning and DIY, it saves so much money over time. I think the younger the better. Teenagers are too cool to pay attention, at least I was, and didn't appreciate my Mom's skills until much later. If only I'd listened more to my Granny who could grow any flower and had amazing gardens ever year. I've actually killed cactus before.
    • Shannon Ryan
      Sunday, October 5th, 2014
      I think household skills are often overlooked but not being able to cook basically forces you to eat out or buy more expensive ready-made food. And knowing proper maintenance on your home and car is important too. Not doing the needed maintenance can be incredibly expensive. And I agree, the younger you can do this the better. Younger kids are less resistant and it becomes a habit. Even they don't like it as a teen, they know why things have to be done.
  10. Thursday, October 2nd, 2014
    I think you are wise to teach your girls how to use credit cards before they leave. So many kids are first introduced to those when they are in college. And without training from home beforehand they have no idea how to use them and rack up all kinds of debt. My sister went to grad school with a girl who already had over 40k in credit card debt...mostly from shopping for clothes and other stuff and partying with friends. Only a fraction of that was school related items.
    • Shannon Ryan
      Sunday, October 5th, 2014
      That is exactly why I want the girls to learn how to use them with my supervision. It won't prevent them from ever making a mistake, but they will understand how they work and why we avoid interest. Of course, we've already had those talks but it's always different when you hold the credit card. I want them to feel confident using it properly because they will likely see many of their peers not do so and pressure them to just "put it on their card" too.
  11. Thursday, October 2nd, 2014
    Hi Shannon,

    These tips are so helpful. I've got two who are getting ready to go off to college and they'll be living in the dorms.

    We've been talking about money and how to save. I intentionally left out laundry ;) but I guess I can help out there LOL.

    Thanks for the tips! I'm definitely using these! Hope you're having a great week!

    • Shannon Ryan
      Sunday, October 5th, 2014
      Such a busy and exciting time for you and the kids. I know you've been working hard these past couple of years to make them money savvy and I know they will do great. Even if Mom still has to give a few pointers on laundry! :)
  12. Friday, October 3rd, 2014
    These are all things a grownup should know and we also plan on properly preparing our daughter for the future. If our generation made some huge mistakes, at least they should be better prepared.
    • Shannon Ryan
      Sunday, October 5th, 2014
      It's definitely scary because there are definitely some adults that need to learn these essential money skills themselves. I'm glad you're going to be preparing your daughter to learn these skills when she gets a bit bigger.
  13. Sunday, October 5th, 2014
    More parents need to be aware that their attitude towards money is passed on to their kids. We learn from our parents, but unfortunately we pick up their BAD habits too. Financial education classes have just been made a compulsory part of the national curriculum in the UK but it's a controversial move because it seems to be a vote-winning move rather than an education-based decision and many people are questioning whether the classes will make any difference to the way young people understand money and debt. In the end, parents need to step up because they are the ones who influence our spending habits most.
    • Shannon Ryan
      Sunday, October 5th, 2014
      We definitely pick up both good and bad habits from our parents, Myles. That's interesting about financial education classes becoming a requirement in the UK. It's not here in the States and it something more and more people are clamoring for. I am definitely a proponent because so few are getting any form of financial education within their home. At the same time, parents are always going to be the best teachers because they are who the child sees handle money every day.
  14. Tuesday, October 14th, 2014
    I loved these 2 posts! All great things for teens to know before leaving home. I'm glad that I knew at least most of these things before I left home.
  • Meet Shannon

    "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