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Include Money Management in Child’s Education

Gelman, Rosenberg & Freedman CPAs is a member of CPAmerica International, an association of CPA and consulting firms that provides industry knowledge including insightful articles, to help member firms serve clients and other individuals and organizations.

Parents have two major responsibilities regarding their children – to care for them and to teach them. When it comes to issues about money, deciding when each responsibility applies can be tough.

mother teaching child

Parents are often torn between providing for the child’s needs (or wants) and teaching the child to handle money responsibly. While there are not hard-and-fast rules on this issue, these principles may be helpful:

  • Scarce resources. Regardless of how much money you have, you still have to use your resources wisely because they are not endless. Children need to understand this concept, and requiring them to make choices can help you teach this.

If you meet your children’s every request without discussion, they may begin to believe they have only to ask and good things will always happen – in other words, there is an endless supply. If you allow your children to have only a certain amount of money for their purchases, and if you require them to think through choices and make decisions about what they get, they’ll develop more of a sense of value.

  • Responsibility. Most of us earn money by taking on responsibilities. We work, and we get paid. Children need to learn the value of work and the reward that comes for a job well done.

Very early, children can take on duties around the house or yard. They can learn the pride of a job well done, and they can take extra pleasure in spending money they have earned. Provide fair compensation for the job, and require an acceptable level of quality. Your children will learn many lessons from this principle.

  • Delayed gratification. In today’s world, instant gratification is the norm. If we want something, we want it now. The idea of planning ahead and saving for something we desire is an under-rated concept.

If you help your children set longer-term goals and teach them to save money to achieve their goals, they’ll learn patience, discipline and self-control. When they are finally able to purchase the desired object, they’ll appreciate it even more.

  • Value. Even when money is available, deciding how best to spend it is a lesson children need to learn. All products are not created equal, and price alone doesn’t always reflect the value the product will provide.

Teaching children to compare options and features as they relate to price can help them with larger future purchases. If they learn to be diligent about buying decisions, they’ll make smarter purchases.

Many of these lessons can be taught starting at a very young age. One mother set up a treat store at home where her children could spend their allowances when they were pre-school age. They were paid for doing chores during the week. Then on Friday, the “store” would open.

They were allowed to spend half their allowance each week, saving the other half for larger future purchases. While this is just one example, both of these children have grown into very responsible, money-conscious adults.

It’s natural for parents to want to give things to their children and to want their children to have it easier than the parents did growing up. Still, money lessons are important life lessons. The consequences of not teaching them can be devastating.


Over the years, Jerry has become like my accounting father. He has a calming effect. Jerry’s wealth of knowledge of the government contracting and accounting industries has been invaluable.

Jean Crowder Drummond MA PA |  President
HCD International