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3 Advanced Money Tips For Kids

A few weeks ago I helped my eldest daughter (11) set up a Money Tracking Spreadsheet (which you can find and download here). As she has been updating it, she has been asking questions and wanting to make it her own. I've been so pleased with how engaged she has been with it.

In this blog, I thought I'd share 3 of the different changes and questions that have come up since we set up the spreadsheet. I've called these '3 Advanced Money Tips For Kids' as they are more for kids who are 11+ years old, i.e., I haven't discussed these with my youngest daughter (8) yet.

3 Advanced Money Tips For Kids

1. Managing pocket money monthly rather than weekly

The Money Tracking Spreadsheet is set up to be updated monthly. Therefore, we agreed that we would change from giving her pocket money weekly to monthly.

This means she has to be a lot more responsible with her money. It's very easy to get excited about a larger amount of money but she knows it has to last longer.

My wife and I know that this is an increase in responsibility for us too. If our daughter runs out of money early in the month, we have to be strong and not pay for things she should be paying for herself. It's from these experiences that she'll really learn a lot.

If you aren't giving your kids pocket money, then please check out my blog here

2. Taking ownership of expenses

As my eldest turned 11, she didn't just receive a new spreadsheet, we also got her a mobile phone (very reluctantly!).

The contract is around £10 per month and we have set this up to be paid automatically from our account.

As we want our daughters to learn about managing expenses as they grow up, we have told our daughter that we have increased her pocket money by £10 per month but we are using this money to pay for her phone. This means in her spreadsheet she sees a £10 increase in her income and a £10 increase in her expenses (shown as 'Spent' in the spreadsheet).

Whilst the increase in income and expenses cancel out each other, I believe it's important that kids start to appreciate that they have some expenses in their name. As they get older, we'll start to add more things to her expenses in her spreadsheet.

For many kids, they don't appreciate what expenses they incur and then BAM!, they become an adult and suddenly have to pay all these bills. I hope our approach will allow my daughters to appreciate the expenses they incur and start to consider how much things cost and how much they need to earn as they grow up to cover these expenses.

3. Accounting for investments

We invest a small amount of money each month for our daughters. This is recorded in my daughter's Money Tracking Spreadsheet. She also allows for any money she wants to invest each month. I'm proud to say that she is investing at least 10% of all the money she receives, i.e., following the first two Rules of Wealth.

When we record the amount she has in her investments, we choose not to update this based on what the stock market is doing. If we did, each month the amount would change a lot depending on if the stock market moved up or down that month. This would lead her to be either very happy or sad.

As my daughter isn't expected to sell her investments for many years (hopefully decades even), we ignore the noise of short-term changes in the stock market. However, we want to make some allowance for the fact that we expect the investment to increase over time.

Our approach is to use the 4% Rule. This means we assume that her investments will increase by around 4% each year (this is cautious as historical averages have been around 7-10% per year over the long term).

Some years this will be too much and others too little but on average over time it allows for some growth of her investments. I believe this is important to motivate her to keep investing over time as she updates her Money Tracking Spreadsheet. I'll write a blog on the rationale for the 4% Rule soon so make sure you subscribe below so you don't miss it.

Applying the 4% Rule...

The 4% Rule means each month my daughter increases the amount she has her in investments by 0.327% per month, i.e., 0.327% per month is the same as 4% per year.

If you want to put this into a formula, then this means multiplying how much she had in investments the previous month by 1.00327. For example, if she had £1,000 in investments last month, this month she would have £1,003.27 plus what extra money she decides to invest that month.

This means she also sees that she has an income each month from her investments. In the example, she made an extra £3.27 due to her investments. As this money is still in her investments, she'll see that the amount from her investments increases each month due to Compound Interest. If you haven't spoken to your kids about Compound Interest.

I note that this is our family's approach to accounting for our investments. There are many other ways, such as updating each month based on the stock market changes.

If you are keen to learn more about investing, then check out my Special Bundle Offer which includes a 3-step guide to setting up an investment account for your kids, an online course, a book (Grandpa's Fortune Fables), games and worksheets for your kids learn to about investing. Click here to buy now.

If you have any questions or comments about the FREE Money Tracking Spreadsheet, please do let me know at


As your kids get older, help them take on more financial responsibility.

In this blog, I set out three areas in which my wife and I are helping our eldest daughter take more ownership of her money. This includes:

  1. Managing pocket money monthly rather than weekly

  2. Taking ownership of expenses

  3. Accounting for investments

Thanks for reading! Don't forget to subscribe below.


P.S., If you are worried that your kids don't how to manage money, then grab them a copy of Grandpa's Fortune Fables. After reading the book, they will know more about money than most adults.


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