Instilling a healthy money mindset in kids is essential for their financial well-being and overall life skills. Not only does this education set children up for financial success, it also limits mental health challenges related to money management in the future.  Studies have consistently shown a strong link between financial stress and symptoms of anxiety and depression. Financial stress can also lead to chronic stress, which can negatively impact overall well-being. Chronic stress can contribute to a range of physical and mental health problems, including heart disease, obesity, and anxiety disorders.  In addition, money challenges are a common source of conflict in relationships. Marital and family discord related to financial stress can contribute to emotional distress and deteriorating mental health.  

Knowing this, how can we instill a health money mindset in our children? Here are some strategies and tips to help you teach your children about money in a positive and responsible way:

Start Early: Begin teaching your children about money at a young age. Even preschoolers can begin to grasp basic concepts like saving and spending.

Lead by Example: Children often learn from observing their parents’ behavior. Show them responsible money management by budgeting, saving, and making informed financial decisions.

Open Communication: Have open and age-appropriate conversations about money. Answer their questions honestly and encourage them to ask questions about financial matters.

Needs vs. Wants: Teach your children the difference between needs (essential items) and wants (non-essential items). This can help them prioritize their spending.

Allowance: Consider giving your child an allowance or a weekly/monthly budget. This can help them learn about budgeting and making choices with their own money.

Saving and Goal Setting: Encourage your children to save a portion of their allowance or any money they receive as gifts. Help them set achievable savings goals, like saving for a toy or a special outing.

Delayed Gratification: Teach them the value of patience and delayed gratification. Explain that saving for something they really want can be more satisfying than impulse buying.

Budgeting: Show them how to create a simple budget, including income (allowance, gifts) and expenses (toys, treats). This can help them understand the importance of managing money.

Earning Money: Encourage them to earn money through age-appropriate chores or tasks. This can teach them the connection between work and income.

Bank Accounts: Open a savings account in their name and take them to the bank to make deposits. This can help them learn about the banking system.

Teach About Debt: As they get older, introduce the concept of borrowing and debt. Explain that loans, credit cards, and loans should be used responsibly and not as a source of free money.

Investment Basics: When appropriate, introduce them to the basics of investing. Explain how investments can grow over time and the concept of risk and return.

Charitable Giving: Encourage them to donate a portion of their money to a charitable cause. This can help them develop empathy and an understanding of the importance of giving back.

Learning Resources: Utilize age-appropriate books, 

games, and online resources that teach kids about money. There are many educational apps and websites designed to make

learning about finances fun.

Consistency: Be consistent in your teachings and financial rules. Consistency helps reinforce the lessons you’re trying to impart.

Mistakes are Le

arning Opportunities: If your child makes a financial mistake, use it as a learning opportunity rather than a punishment. Help them understand what went wrong and how to avoid similar mistakes in the future.

Remember that teaching kids about money is an ongoing process. As they grow, you can gradually introduce more complex financial concepts and responsibilities. The goal is to equip them with the knowledge and skills they need to make informed and responsible financial decisions throughout their lives. Providing our children with this strong financial education foundation will set them up for mental health and financial health success in adulthood. 

Wendy Galyen, LSCW, BC-THMOwner, Thrive for Life Counseling