Financial Independence For Women 13 – Teaching Your Kids About Money.

Chapter 13 

“A man once told me that he had just given his daughter a substantial amount of money because he wanted her to be financially independent. I looked at him and said, ‘No, you don’t understand; you just made her financially dependent!”

Joline Godfrey, author of Raising Financially Fit Kids


When I was a kid in school, no one ever taught us about money – and I have yet to see any school curriculum with the lesson “Money 101.” College students can sign up for an economics class, or a business class – but who is teaching these students about personal finance? And, as we know, most of our habits with money develop at a much younger age when our money blueprint is being formed. It’s absurd to me that an institute that is supposed to be preparing upcoming generations to run our world – is not teaching them the most basic tool to go through life: money!

This may change over time, but for now since the schools are not teaching our kids about money, it is our job as parents to teach them. Just like we teach our kids about the importance of eating well, getting exercise, and the value of education, we need to be teaching them about how to manage money. I know this goes against what a lot of parents are used to talking about (research shows that money, sex and death are the three main topics that grown ups do not talk about with their children), but we need to do it. Isn’t it funny that these three topics are the ones that actually play the most vital roles in our life?

Think about it: If children do not learn about money at home and they do not learn about it at school, where will they learn about it? Come to think about it … where did you learn about it?

If you looked at the way you handled money (before this 6-week course), you may have noticed that some of your ways were identical to the ways one or both of your parents handled money. Your ways may have been identical to your parents, or maybe the way you handled money was the total opposite. Either way, your behaviors were still a reaction to what your parents did. The fact is that children do either exactly as their parents or the total opposite. Your model was your parents. This is the same for your children.

Whether we want it that way or not, our kids are learning about money through our attitude, behavior and actions. Unless you explain to them why you are doing what you are doing with your money, they will have their own interpretations – which may or may not be true to what you are thinking.

“Kids mimic how parents handle money and listen very carefully to what they say about it,” says Eric Sussman, a lecturer at UCLA’s Anderson Graduate School of Management. We’ve got to face it that they learn by watching us and then copy our behavior. With this is mind, are your kids getting the right lessons about money?

I want to point out that teaching our kids about money is not just about talking to them about it, but involving them in it. One of the most interesting research studies I read showed that a good number of third generation people coming from rich families lost their family assets and money due to the fact that they were not taught by their parents the right mindset to be responsible with money. They were also never taught and engaged by their parents in the habits of highly successful rich people. They took the money for granted. You see, inheriting money, without the right mindset and toolset to handle and manage the money, will not take you very far.

It is not the MONEY that would set you free; it is the right mindset and the right tools to handle money that would set you free. Let’s teach our kids these things.

Why It’s So Important to Teach Our Children About Money.

In the U.S., children between the ages of 8 and 14 control 39 billion shopping dollars and influence billions more in purchases, according to a 2003 report from Market- Today, entire conferences are organized around the goal of teaching businesses to build brand awareness in teenagers.

If Corporate America is focusing on teenagers, we need to think about: How can we teach our children to NOT be brainwashed by marketing ads and consumer mentality? How can we raise them to be responsible with their money, be independent thinkers, and not follow the herd when it comes to spending their money?

If we want our children to grow into confident, capable adults, it is important to teach them from a young age how to handle, manage and be responsible with money. I have heard story after story from women about how they were dismissed as young girls when they asked their fathers about money and business matters. “You won’t have to worry about that,” was a common response from dads. We see where that got us.

If we want to break the cycle of the “damsel in distress” we need to become trailblazers for our daughters. We not only need to be role models for them in regard to how to take responsibility for money, but also role models for how to create a relationship that is about partnership, love and respect. If we model dependency and helplessness in love and money, that’s what they will get. I don’t think that’s what we truly want for them. It’s time to step up and speak up for ourselves and as a result, we will give our daughters a great gift.

Teaching My Daughter About Money.

When our daughter was nine-years old, Nisandeh and I started teaching her about how to earn, handle and manage money. We had just returned from the financial freedom course in Seattle and were inspired to get on this path with our daughter right away. We wanted her to get the right messages about how to earn and increase income as well as teach her about the different uses of money.

Today our daughter, as a young adult,  understands the concepts of savings, investments, passive income, and spending. She knows the value of money, her hourly value, and most importantly she knows that the only way to get money in this world is by giving value to other people. She knows that if she wants to get more money, all she needs to do is find out how she can bring more value to more people.

You see, what we did with her was not just talk about money; we showed her how to create her own money management system. Teaching her this system helped her understand how the money game is played. The rules: the more value you give to more people the more you will be paid. Once you get paid, you want your money to work for you. To do this, you need to start saving money to generate passive income.

At first we made the same mistake as most parents do – we gave her weekly pocket money (aka an allowance) without any job attached to it. Most parents who I have spoken with think this method will help their kids start learning about the value of money. But if you think about it – how will they learn from this? In real life – would someone truly give you money without any reason? NO.

But, we fell into that trap because that’s what we saw our friends’ parents doing and is what our parents didn’t do. You see, neither my parents nor Nisandeh’s parents had the money to give us a weekly allowance, but we always saw other kids get one – so we thought this was the “right” way to do it. Both Nisandeh and I wanted to be the opposite of our parents – so we thought giving an allowance to our daughter would ensure this. This is a perfect example of how we handled money in the opposite way than our parents, but we still didn’t get positive, healthy money habits.

It took us awhile to realize that the system of giving our daughter weekly pocket money didn’t work. She spent all her money on “junk” (at least in our eyes). We realized that we had to change something. We decided to do something that went against our own conditioning and even some of our beliefs. We decided to employ our daughter.

Our daughter’s employment consisted of chores in the house – washing dishes, setting the table, taking out the trash, and organizing her room. We assigned a financial value to each task and put up a schedule (indicating each task’s value). Some tasks were valued more than others according to the value they added to the family. For instance, setting the table is a simple task. For this she earned 50 cents. For organizing her room, she earned $2.50. This was valued at a higher rate because it saves time for me, decreases the amount of time we pay for the cleaners, and teaches her about order and cleanliness.

Using this system allowed our daughter see the correlation between how much she earned and the value she added to the family. Each time our daughter completed a task, she would mark it on the schedule. At the end of the week she would do the calculations to see how much money she earned.

Since she was the one in charge of these calculations, this allowed her to overcome her fear of math and numbers (that she probably inherited from me!).

Trust me, at first this system wasn’t easy for us. Both Nisandeh and I grew up with the belief that every child has duties at home and they do not get paid for them. For us, these duties were part of being a member of the family. You need to WANT to help in the family. That was the expectation. Well, that was true in those days … or was it? We live in different times and the kids of today are much more independent – and much less tolerant to authority.

They are not willing to accept orders and duties as easily as we were. They want explanations. They want to understand why they have to do things. You could say that they are much more into WIIFM – What’s In It For Me?

We realized that it wasn’t serving our daughter to fight this. We needed to find other ways help her understand the importance of contributing to the family, having responsibilities, adding value, and giving back to society.

The money that our daughter earned at the end of the week was divided between a savings account, money for investments in the future (which she will choose), money for charity (we want to teach her to give back), and money to spend (which is the largest portion).

Today our daughter is still using the money management system. Any amount of money that she gets from outside sources she immediately divides into the different accounts. When she was old enough, we opened two bank accounts for her in her name. One account is for the investment money, and the other is for savings. She has access to the savings account so she can see how much she has in there. The interesting thing is that as we walk through the city our daughter is able to recognize possible passive income sources for people. She likes to make a game out of differentiating between working income sources and passive income sources. This knowledge is a great thing for a young woman.

The funny thing is that when we first started teaching our daughter about a money management system, she didn’t talk about it with her friends. She felt that it is just another “odd” thing that her “weird” parents were doing. She wanted to be “cool” and the money management system didn’t sound to her like a cool thing. However, every time a friend came to our house and saw the weekly plan on the refrigerator, the friend would ask her about it. When she explained, the response she got was “Gee, can I show this to my parents? I wish my parents would do this with me.”

Finally our daughter saw that the money management system was a “cool” thing to do – and she started to be proud of it. She even started to talk about it in school!

Ten Basic Money Skills To Teach Your Kids.

In her book, Raising Financially Fit Kids, author Joline Godfrey suggests teaching children what she calls “The Ten Basic Money Skills.” They are:

  1. How to save.
  2. How to keep track of money.
  3. How to get paid what you are worth. How to spend money wisely.
  4. How to spend money wisely
  5. How to talk about money.
  6. How to live on a budget.
  7. How to invest.
  8. How to exercise the entrepreneurial spirit.
  9. How to handle credit.
  10. How to use money to change the world.

Most parents think that being a parent is who they are and they end up being responsible for their kids all of their lives – even when that child is over 40 and has kids of her own. With this mindset, they raise kids that will never be independent or free because the parents WANT the kids to depend on them for the rest of their lives. Most parents think that if they stop being a parent, they will lose their own identity. They forget that being a parent is actually a job that has to be done – and it isn’t who they If it is a job that needs to be done, then that job has a job description: To teach our children how to live in the world successfully and independently.

If we realize that this is our role as parents, then teaching them about money and how to take control of it is one of the first things that we need to teach our children. But how will we be able to do this if we ourselves fail in this department?

Only when we ourselves have mastered our own fears and demons with money can we teach our children healthy ways of relating with money. I was fortunate enough to learn how to take control of my money at an age when my daughter was young, so by the time she was at an age when she was open to learning about money, I could teach her healthy ways of handling her own money. Although we started our daughter when she was nine, I know of many of our students who have taught their own children this same money management system (which we teach in the Financial Freedom Intensive) as early as four and five-years old. Basically, the minute they have learned how to count. As the old saying goes: “If you want to learn a thing, read that. If you want to know a thing, write that; if you want to master a thing, teach that.”


Educating your kids about money from a young age will help them grow up to be confident, capable, and successful financially independent adults.

Our job as parents is to prepare our children to be successful in their own in life. If we do not teach our children about money, we will be neglecting our job description. Remember what it has been like for you learning about how to manage money as an adult. Wouldn’t it have been wonderful to have these lessons earlier in your life? As you may well know from your experience, if you don’t teach your kids about money, they are much more likely to have money problems as adults. This is another reason why it is so important for you to learn about how to take care of your money.

 Introduce your children to money early. Give them opportunities to earn. Teach them about savings, investments, and giving to charity and causes. Have family discussions about money. Take the time to do this. Teaching them now will go a long way toward ensuring their success as financially independent, happy adults.

Questions for Reflection:

  1. If you have kids, what have you taught them about money through modeling behavior?

  2. What else have you taught your kids about money? Do they receive an allowance? If so, are there jobs or tasks attached to earning their allowance? Why or why not?

  3. Of the “10 Basic Money Skills,” recommended by Joline Godfrey, which skills do your kids have?

  4. What will it take to teach your kids the skills they are missing? Write down some of your ideas.

  5. What could you do differently to help your kids develop a healthy relationship with money? Write down your response.

Commitment to Yourself:

Commit and stick to it!

I commit to educating my children about money so that they can build a healthy relationship with this important part of their lives.


Say these affirmations out loud as often as possible. The more often you hear yourself saying these words, the more you will internalize them.

I am a great financial role model for my children.

I am providing the tools for my children to develop into successful, independent adults.

 I am teaching my children healthy ways of relating to and managing their money.

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