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What Are You Teaching Your Kids About Money?

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Recently, in an effort to force myself to slow down a bit and actually relax, I started watching a few episodes of the hit-show The Goldbergs, which is set in 1980s Pennsylvania.

In one of my favorite episodes, Murray, the family patriarch, is sitting in his recliner, without pants, and his wife, Beverly, is in the kitchen, when his oldest son, Barry, approaches and asks for money. Here is their conversation:

kids allowance | kids money lessons | teaching kids about money | kids savings | kids chores ideas

Barry:  What if I told you one day there’d be a piece of technology that can guarantee I play professional basketball? Well, that day has come. The Reebok Pump. A cushion of air around the foot that literally allows you to defy the laws of gravity. And the amazing part? It’s only $175. Don’t say no.

Murray: No.

Beverly: Honey, I’ve got a pair of Reeboks upstairs you can have.

Barry: Oh, really? Can I please borrow your beige mom sneakers? Listen! My dream is to be a basketball superstar, not a nurse!

Murray: Well, here’s the thing about your dream. It’s stupid.

Barry: You have the money. Just get your pants and give it to me.

Beverly: Barry, your father’s pants are not a bank.

Murray: Money comes from hard work, you moron. You really want those shoes, come down to the store and work for ‘em.

Barry: Fine! But when I get to the NBA, and you want my autograph, I’m signing it, “Worst wishes, Barry.”

As I watched this episode, all I could do was laugh–a lot. An hour later, as I lay in bed, my stupid brain could not stop thinking about this conversation and the events which followed.

Goldbergs

Barry Goldberg begins working with his father at the local furniture store. Ironically, he is a natural salesman and does very well, but his success comes after some early struggles. When his first payday arrives, Barry is astonished to receive a paycheck for $33.

Barry: Is this some sick joke? Oh. You’re just busting balls, huh? This is a joke paycheck.

Murray: I wish I was busting balls. Welcome to the real world.

Barry: I know I made more than this. Why is it so low?

Murray: Taxes! You got federal, state, social security, F.I.C.A..

Barry: What are you talking about? Those aren’t real things.

Murray: Did you ever go to school? Taxes? Those are totally real things.

Tough Love and Tough Lessons

In these two brief scenes, Barry Goldberg’s words and behavior provide a glimpse into the American entitlement culture and the interconnected role of money.

  • Barry is easily swayed by the power of advertising.
  • Barry expects money to be given to him rather than earned.
  • When Barry begins to work, he overvalues his contributions and expects unrealistic earnings.
  • Barry is oblivious to the basics of federal and state taxes.

Fortunately, Murray Goldberg, while unconventional, is a good dad at heart and teaches Barry key lessons about money in a very short time.

  • Money is easy to spend but difficult to earn.
  • Money comes from hard work, moron!
  • Taxes are a painful reality.

Early Money Lessons

Fortunately, my Dad wasn’t too much like Murray Goldberg when I was growing up. He wore pants, most of the time, and didn’t call me and my siblings morons.

Like Murray, Dad worked hard to provide for our family, and he made sure that we did not go without anything which was truly a need.

On the other hand, we experienced our fair share of tough love, and I am grateful for that today.

Like Barry Goldberg, I used to ask my Dad for money for many unnecessary things, like going to the movies with friends or baseball cards. I quickly learned a simple lesson:

Work and get paid; don’t work – don’t get paid.

When Dad opened up his wallet, I could be sure that I would soon be raking leaves, mowing the lawn, or climbing up on the roof to clean out the rain gutters in order to earn the money bestowed upon me.

A Plan for Raising Children Who Understand Money

My wife and I do not yet have children of our own. However, between the two of us, we know a thing or two about teaching children as a result of our professional backgrounds as teachers. When we do have our own children, we plan to carefully implement the following techniques and teach  financial lessons:

1.) We will let our children see how we manage our finances. We will be appropriately transparent, within obvious reason, so our kids learn the value of money.

2.) We will implement commission rather than allowance. Our children will learn that those who work get paid and those who do not work do not get paid.

3.) While the importance of work and the natural compensation which follows will be emphasized, we will teach our kids that not all work is for the purposes of getting paid. Sometimes, we will roll up sleeves and work to serve other people and support the community. Sometimes, we will work to care for our own household or personal belongings. Pay is not to be expected for all work.

4.) We will guide our children to give, save, spend, and invest. Dave Ramsey touts the “give, save, and spend” mantra, in that order, and I don’t have a problem with it. We want our children to experience first-hand that that money is not meant for hoarding; rather, it is a tool to take care of both oneself and others, too.

As a result, some of our children’s savings will be in a liquid money market or savings account. This won’t be about earning interest, which will be low, but it will show our children the value of having money remaining and to teach them not to spend all they earn. When they want to spend all of their money and deplete their savings, we will let them from time to time (this will be SO painful for me!) and allow them to learn from their mistakes at an early age.

In addition to learning about spending and proper decision making, we will teach our children about the power of investing when their limited earnings permit it. We believe that children can learn the power of compound interest at an early age. If their earnings won’t support investing, we will involve them in the process of funding their ESA and 529 accounts when they are mature enough to understand.

5.) Likewise, we will emphasize the importance of investing to instill a long-term mindset. We will start them early on this so they think investing is “just normal” and “what everyone else does.” They will be astonished when they look up as adults and see that their once small investment has grown due to time and compound interest.

Leaving a Legacy

As my wife and I get closer and closer to starting a family of our own, I have thought increasingly about the legacy we will leave behind. I have thought about all I have learned from my elders, including my Grandpa and Grandma and my parents. I know I will be like most parents and rarely have all the right answers.

In the ancient Book of Proverbs it is written, “A good man leaves an inheritance to his children’s children.” Through education and experience, we hope to leave this kind of inheritance, built upon a foundation of love, wisdom, and stewardship.


Readers with children, what have you taught your children about money? Do you provide an allowance? At what age do you believe children should begin learning about money?

Readers without children, how did your parents teach you about money? What lessons remain vivid in your memories today?

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  1. That was a great episode of The Goldbergs. I think it’s great that you and your wife are laying out a plan for teaching your future children about money. We are teaching our three as much as possible. We have included them in our budget discussion, explaining costs of the entire household. It’s never to early to start teaching your children about money. It’s something they will use for their entire lives, and there are age appropriate teachable moments along the way.

    • I’m not a huge TV person, but The Goldbergs is a big threat to my productivity!

      I am sure your kids will be excellent financial stewards, Brian. If only more people looked for natural teachable moments. . .

  2. LOL, we love that show!! Yes, we are teaching our kids those same things. We were never taught about money but shown that debt is okay and it caused LOTS of trouble for us. Now we are being an open book to our kids as we work our way out of our past financial mistakes. Great post!

    • Thanks, Laurie. Isn’t it interesting how children tend to adopt their parents’ ways of handling money? You are poised to change your family tree completely through simple acts of transparency with your children.

  3. My little one is only 2 so a bit too early to start, but I think about how I’ll do so fairly often. I think Brian nailed it in his comment above. There are a number of teachable moments as they grow up so exposing them to that as much as reasonably possible would be beneficial.

    • Brian sure has a great ability to say a whole lot with only a few words, doesn’t he? Teaching financial lessons to children is much more successful when it comes within the natural flow of the day to day routine.

  4. Sounds like we are dealing with the same kids-money issues. We plan to do similar things…
    1- basic list of tasks, allowance for extra tasks
    2- learn to save for bigger things, spend some money now

    They now are in the state of mind that money comes from the bank, just like that. Just this week I explained we have to work and then our employer deposits the money at the bank. that was an eye opener for them.

    Also funny, they think giving a 1 euro coin will speed up their Jamaica holiday plan! I love kids and their simple, honey innocent approach to things!

  5. As you know I do not have kids but remember that they can learn concepts such as money management as early as 5! (Obviously very simple techniques that they will not even realize until they are older) My dad was all about tough love and I never appreciated it until my junior year in college quite frankly. Expect the tantrums and everything but they will thank you later on. Think we all learn that tough love works for the future.

  6. Fantastic article and great advice. I think it is absolutely critical for kids to see how their parents manage their finances and have the experience of working for their own things. Even if you help them out with purchases, letting them understand what goes into each of those is critical.

    Great post and I have no doubt your kids will be well set.

  8. I have no doubt at all that your future children will be well schooled in all things finance. Financial education for our younger generation is something I’m extremely passionate about. I work in debt management, you would be horrified at the number of 18-21 year olds in the UK who are already so badly overstretched that are placing themselves into insolvency and sometimes even worse, bankruptcy. Prevention is better than cure!

    • People like you are the ones who have the power to inspire change, David. That must be so rewarding to help people climb out of their own foolishness.

  9. I’ve seen parts of that show and if I had more time, I’d check it out. We have a toddler and we definitely want him to be financially literate…we still have some time to figure it out. My parents were always frugal and I rarely asked for anything. I knew what the answer was, plus I knew our family couldn’t waste money on frivolous things. I think a huge part of it is being a good role model. I know a dad who likes to buy the latest gadgets and nice clothes all the time, etc…it’s hard to say no to kids when your actions show the opposite.

    • It sounds like you have your hands full with a toddler at home, Andrew. The Goldbergs is definitely worth checking out if you find a spare moment.

      I had to laugh a bit when you said you didn’t ask your parents for money because you knew the answer would be “no.” That was usually the answer I got, too, but it didn’t stop me. I was persistent to a fault. 🙂

      And you’re absolutely right about the value of serving as a role model. Too many parents today seem to have adopted a “do as I say, not as I do” mindset.

  10. It’s tough learning the realities of the world. I can’t help but laugh at this exchange, but I’m sure it happens every day. I don’t have kids yet, but I do hope to teach them from an early age “how it really is” with money.

  11. We started paying our children an allowance sometime before the age of 10. They have specific things they must do or they lose a portion. Plus, they can earn extra for doing extra chores. We also pay them extra for the number of books read.

    From their allowance, they pay for things like their cell phones, gifts, and anytime they go out with friends. When we go out as a family, we pay, but when they go out with friends, they pay.

    We also match anything they chose to save/invest.

  12. It’s so important to get kids on board early financial literacy and how to get their house in order of you will. We rarely spend money on something we don’t need and when the kids ask, it’s usually up to them to use the money they earned to fund their wants.

  14. My parents have wildly different attitudes to money and gave wildly different lessons. My dad saves and is frugal, and retired before he was fifty. My mother earns less, spends more, and will never be able to retire. The lesson is easy if you look.

    • It’s so interesting that such differing money attitudes can co-exist within families. It sounds like you could write several posts about this dynamic, ZJ!

  15. Hey there Hero,

    At the moment we don’t have kids (we are trying to through IVF treatments (we blog about this)). We will definitely try to teach our children good habits with earning, spending, saving and perhaps investing.

    My parents didn’t really teach me anything about finance. Literally the only mention it got was that one time a $20 thing was expensive (can’t remember what it was). They were on top of their money, they invested, they budgeted, but they didn’t teach me anything. Nor instill a work ethic.
    My wife’s parents didn’t teach her anything either. They are addicted to debt, have no interest in FI (they are interested in get rich quick things though); they are terrible role models. However they make for good I-don’t-want-to-be-like-that examples.

    We have learned all the good financials traits ourselves since we moved in together a couple of years ago, which I’m proud of us for doing so.

    Tristan

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