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4 Things Kids Should Know About Money

I’ve now written over 150 different blogs to help parents teach their kids about money. In this blog, I have reflected on what I believe are the top four things kids should know about money.

Top 4 things kids should know about money

ONE: Action is more important than knowledge

When it comes to money, it is the actions that we take that determine our financial well-being. It's the same for our kids. We need to make sure kids know that being good with money is about taking small actions consistently over a long period of time.

It’s not about knowing all the fancy financial jargon and coming up with super clever strategies. In fact, only one of the 4 points on my list today is about ‘financial knowledge’ - the others are about having the right money mindset and following the ‘3 Rules of Wealth’.

There is no magic behind the ‘3 Rules of Wealth’. Those that follow the 3 rules go on to be financially healthy and wealthy. The challenge is that most people don’t follow these rules. The world is set up to stop you and your kids from following these rules as companies want us to spend, spend, spend.

The 3 Rules of Wealth from Grandpa's Fortune Fables
The 3 Rules of Wealth from Grandpa's Fortune Fables

Help your kids start to form great money habits now. The two things you can do are:

  1. Each time they get some money, get them to keep 10% to help them follow the 1st Rule of Wealth

  2. Open an investment account for them to help them follow the 2nd Rule of Wealth (see my investing guide for help)

Don’t get me wrong, I still believe that financial knowledge is important (I’ve written many blogs on different topics) but it is secondary to taking action.

If you’re not already, consider giving your kids some pocket money each week (if you can afford to do so). This will allow them to start forming some great money habits.

Useful links on these topics:

Remember, a 16-year-old who runs every day is healthier than an overweight doctor, despite the vast difference in knowledge about health.

“Are you helping your kids take great money actions?”

TWO: Patience is the superpower of the wealthy

‘Being Patient’ is the third rule of wealth. It’s the superpower of the wealthy and something that I write about a lot. Even last week, I wrote a new story to help parents teach their kids the importance of this topic (The Professor Of Money).

Please, please, please don’t take patience for granted. We need to educate kids about the importance of patience.

Technology, social media, buy-now-pay-later and contactless payments are all designed to get us to spend more money now. Our kids are going up in a world of instant gratification. This is very dangerous in terms of our kids' future financial well-being. If parents are proactive about teaching them the importance of delayed gratification, they could be sucked into a world of debt as soon as they reach adulthood.

Useful links to help teach your kids about the importance of being patient:

“Are you helping your kids to be patient?"

THREE: The Dangers of Debt

There is one money topic that I believe all kids should know about and that is debt. Not just what debt is but also the impacts of having debt.

I’m not talking about mortgages, I’m talking about using debt to spend (credit cards, buy-now-pay-later, and loans). There are so many young adults today who are suffering from financial stress due to being in debt.

If your kids have read Grandpa's Fortune Fables, remind them of Mr Credit Tree and his red trees.

We need to make sure kids understand the financial and mental implications of using debt. Especially with buy-now-pay-later making it appear so easy and cheap.

We should all want our kids to start their adult life with savings rather than debt.

Useful links to help teach your kids about debt:

“Are you teaching your kids about the dangers of debt?”

FOUR: Avoid Keeping Up With The Jones’

This is probably the biggest topic to teach your kids. Whilst all the above are super important, if they grow up caring about what other people have, they will still make poor decisions, spend impulsively and potentially use debt.

There is no doubt your kids will get exposure to social media as they grow up. This means they will see a false reality where everyone has a perfect life filled with all the things they want. This leads to them comparing themselves to others (not just their friends but millions of people they don’t know).

“Comparison is the thief of Joy!” Theodore Roosevelt

We need to help them understand that social media is a false reality. We need them to understand that a lot of people with all the nice things are probably using debt. Also, many of them might not be as happy as they appear (I.e. after they have posted a picture or video they are sitting looking at their phones waiting for people to press ‘like’ and won’t actually be happy until they see ‘likes’ come in).

One of the best ways to help kids appreciate that not everything is as it appears is to teach them about the difference between being Rich and being Wealthy. You can read more about this in the links below but in short, Rich is what you see when people spend all their money. Wealthy is not something you see but is when people look after their money and spend it on things that make them happy.

Two blogs I strongly recommend you read are:

“Are you teaching your kids to avoid keeping up with the Jones’?”

Don’t forget to use the seed analogy

To help your kids understand the importance of the 4 points above, get them to think of money like seeds. Their goal is to grow their own financial forest.

Using this analogy, they will appreciate that they will only have a forest if they take action (save/invest). It takes time to grow a forest (patience). Planting their seeds in other people’s (or companies’) forests is not helping them grow their own forests (debt). You can’t see other people’s forests, and most people don’t have any trees, so don’t compare and instead focus on your own forest (don’t compare yourself to others).

Get kids to think of money like seeds to help them learn about money
From a single seed, a forest can grow!


In this blog, I have reflected on what I believe are the top 4 things kids should know about money. Don’t get me wrong, there are many other topics which are important, such as budgeting, earning money, investing, and tax but the four in this blog should come first in my opinion.

To recap on these top 4 topics, make sure you teach your kids:

  • To take great money actions - action is more important than knowledge

  • The importance of being patient - patience is the superpower of the wealthy

  • The dangers of debt

  • To avoid ‘keeping up with the Jones’’

I’m sure that if you teach your kids these topics (and put them into action), your kids will grow up financially healthier than 95% of adults today.

What actions are you going to take now to help your kids become great with money?

Please continue to share these blogs on social media and with your friends so that more families can start talking about money at home.

Thanks for reading!


P.s. Each of the topics listed in this blog are covered in different fun stories in my book, Grandpa’s Fortune Fables. Have you got your kids’ a copy yet? Christmas is coming!


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