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How to Raise Financially Responsible Children
How to Raise Financially Responsible Children
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Money Management

How to Raise Financially Responsible Children

Sheila Brenda Andoi
August 18, 2021

Raising children and instilling good personal, physical, mental and ethical conduct in them is an essential aspect of parenting. As in all the other aspects of parenting, teaching children about money and being financially responsible should be one of your priorities as well.

Research by the University of Cambridge reveals that children as young as seven years old have an understanding of basic concepts related to finance. So there’s no excuse not to teach your children about finances. They are not too young to start being financially responsible.

1. Talk Finances With Your Child

Many parents often fail to discuss issues involving money with their children and this can be as a result of various reasons including busy work life, lack of belief in one’s financial self-efficacy and procrastination. Although the money knowledge imparted depends on how old they are, you can make it a progressive journey.

You can begin with the simplest concepts by telling them what money is and what money can do. In essence, you’re teaching them the value of every denomination in shillings with examples of items you have purchased for them before. 

Talk about what a basic budget is and how it looks like. Let them learn how much different products/services cost and give them options. For example, if they want to get product A and it costs more than the amount of money they have, they will have to look for other options that can fit the amount of money they have. 

Financial responsibility also involves borrowing money. You can incorporate this to what you’d like your child to learn. Let them know what borrowing, the effects of borrowing, the virtue of paying back if it’s a loan, and the value of giving as well.

2. Tag Them Along For Shopping

Taking your children along with you when you go shopping might look like just a normal and overlooked activity, but what you don’t know is that it is part of what will shape how they view finances and make financial decisions.

Anytime you want to purchase your family’s household items, include your children in your shopping decisions. You can even ask them to help you make a shopping list and what they think should be included in the list. While at it, mention why you are adding certain items to your shopping list and why you’re dropping others.

 Let them learn about needs and wants. Explain, preferably using practical exercises or a game format, that needs are necessities and that wants are desires.  

3. Open a Basic Savings Account for Them

This way you can introduce your children to what a bank is and what a bank account is. Encourage them to save some money whenever they get it.

If they receive monetary gifts from relatives and family friends, you can use that to introduce them to saving. They can save that money in their savings account or even a home bank if you prefer to use that.

Come up with short-term goals with your children to encourage them to save more. If they want a toy car, you can use that opportunity to ask them to save up any little money they get then when they reach the short-term target you can accompany them to go and buy it.

4. Allow them to Manage Money

One of the ways children learn best is hands on.  You can achieve this by sending them to the shop by themselves to buy something that you need. They will not only learn how to manage money, but also how to relate with people, how purchases are made and their calculation skills will be improved as they will be required to know how much the commodity costs, how much money they’ve been sent with and how much change they will receive from the shopkeeper.

In doing this children also learn discipline with money, improved memory and they get opened up to the art of selling and buying.  

5. Teach them to Give Back

Giving back is an art that should be taught to children to make them understand that as young as they are, they can make a difference in the life of another person.

Empower your children to give back. Tell them what it means to give back to family, friends and the society at large. Teach them in a very simple way the core values of giving back so that they know the reason why they ought to give back.

As you empower them, show them experientially the different ways they can give back. This may include: volunteering in school activities or even in doing house chores at home, donating to noble community projects and causes, and small acts of kindness towards their friends and everyone else.

In the spirit of giving back, children are nurtured to increase their financial discipline, develop generosity, improve the way they manage money and also realise that every little bit, every single coin helps.

6. Lead by Example

Carl Jung, an analytical psychologist, says that “children are educated by what the grown up is and not by his talk.” 

You’ve got to ensure that as a parent, you are practising what you preach. While this is not an expectation for you to be perfect, but be consistent in the very things you’d want your children to learn about being financially responsible.

 As you train your children through all of the above ways, remember that they also need someone/people they can look up to. They need a role model who will not just tell them what to do but who will also shape how they do it by leading as good examples. Model what you want your child to adopt.


Acknowledge that teaching your children financial responsibility is a process which will take time but with consistency and patience, it is very achievable and will benefit them in the long run.

Here’s to raising financially responsible children!

Sheila Brenda Andoi is a communicator, journalist, editor, and writer passionate about human-interest stories. You can find her on Twitter @sheilaandoi

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