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How to teach your kids about ... Paying Bills

Imagine your kids are fresh out of completing university. Then they get a job which pays the average new graduate wage of around £30,000 (£2,500 per month). That’s a lot of money for someone living off a student loan for the last 3/4 years.

They get excited as they think about how they are going to spend the £2,500 they will earn each month! Some might have already started spending in anticipation of getting their new found wealth.

Then reality sinks in. They don’t get £2,500, they only get 75% of this amount as money is taken for tax, pension and student loans. They are now over £600 worse off than they thought they’d be.

As they are earning their own money, they think about moving out to their own place. Now they have to pay rent, electricity, gas, council tax, internet, contents insurance. This could mean instead of having the £2,500, they are left with just a few hundred pounds to spend (if they are lucky!). Unfortunately, they have been spending like they are getting £2,500 into their bank account each month and need to quickly back track or find money from somewhere else … hello debt!!!

This is what is happening to a lot of young adults as they aren’t fully aware of all the bills they have to pay and are therefore not budgeting for them.

It’s so important to tell our kids about tax and bills before they get to adulthood as this is going to be their reality. If they don’t appreciate these expenses they are unlikely to budget for them which can lead to overspending.

Teaching kids about paying bills

In this blog, I go through how one parent is teaching their 7-year-old about paying bills. I’ll also share some of my own views on how to approach the topic of paying bills with your kids.

A unique approach to teaching kids about paying bills

I recently heard a story of a parent who makes her 7-year-old son pay towards the household bills at the end of the month.

Before I go on, I note that she takes the money and then puts it into his savings account (so he isn’t actually paying the bills).

Here’s what this parent does:

👉 Gives her kid a daily task-list (make bed, clean teeth, tidy up room).

👉 If the task-list is complete, he gets $1 a day.

👉 He has to pay bills at the end of the month (total $9 per month - split between rent, electricity, internet).

👉 He is responsible for keeping money aside to pay these bills at the end of the month out of the $1 a day he receives.

This might not appeal to all parents but I feel it is a really interesting approach.

I love that her son is learning ..

… to budget his money so he can pay his bills on time

… that people need to pay for rent, electricity and internet

… the value of money.

I’ve also heard of parents taking ‘tax’ from money their kids receive (again, putting this ‘tax’ into a savings account). Whilst these approaches might sound cruel compared to ‘norms’, I’m guessing these kids will be grateful for these lessons when they are older.

I suggested my eldest daughter (aged 9) starts paying some money towards the bills. She was not keen at all. Although, after talking a bit about why it might be a good idea, she agreed to start paying some when she reaches 12 years old (she probably thinks I’ll forget … I won’t!).

The above example just shows how pocket money is such a great financial education tool. Check out my blog (here) about how you can use pocket money to gradually transfer financial responsibilities to your kids as they grow up so they are ready for the real-world.

Before approaching the topic of bills with your kids, below are some tips which will hopefully help.

My tips for approaching the topic of bills with your kids

ONE: Be open with your kids about the bills you have to pay

Whilst your kids might appreciate that electricity isn’t free, they probably don’t realise all the different bills you are paying. They probably don’t know how much these bills cost. This means it will be hard for them to budget when they become adults.

Why not make a game of this topic and see if your kids can come up with 5 different bills you have to pay. Then get them to guess which are the most expensive. This is not only opening up the concept of bills so they are mentally prepared to pay bills, but it helps them see the money they need to cover these. Lastly, you are breaking the taboo of money. The more you are open about how much you are paying, the more they will see that money is an OK topic to talk about.

For my kids, we are quite open about what we spend our money on and the bills we have to pay. Sometimes we talk about this as part of a conversation about money, other times as part of everyday life ...

“Who left that light on when they aren’t in the room? Electricity isn’t free!” 😆

TWO: Keep it positive

I appreciate that talking to kids about bills is not a positive topic and could lead them to see money in a negative light. It’s therefore really important to find ways to highlight positive messages around this (similar to talking to kids about tax). For example, it’s good to highlight how great it is that we have fast internet all around the house (when we were younger we didn’t originally have internet and when we did end up getting it, it was super slow). Gratitude towards these services is the best way to overcome the negativity of paying for it.

THREE: Read them the Dragon Story

One of my most popular stories, 'The Dragon That Pooped Too Much', is a fun story you should share with your kids. The story teaches your kids to be aware of the ongoing costs (bills) attached to owning a car. The same can be applied to a house, phone, or anything that is expensive.

FOUR: Bills and Financial Freedom

As you’ll know from my blogs, I encourage my daughters to think of money like seeds to grow their own financial forest (by saving and investing). Over time, once their forest gets large enough, it will produce enough seeds to cover their bills whilst they sleep (via passive income). This is when you become financially free. Therefore, let them know that the larger their bills are, the larger their forest needs to be.

This helps them appreciate the need to control how big their bills get when they are older. A lot of adults today are struggling financially as they get a pay rise, buy a bigger house or nicer car and don’t fully appreciate all the extra bills that come from these large purchases.

More you pay in bills, the later you will retire

As a side to this point. A couple of years ago my wife and I spent a day looking to change service providers (electricity, internet, TV) and cancelled subscriptions we weren’t using. It was a painful day of doing admin but we ended up saving hundreds over the year, i.e. one day of work gave us a large bonus!


Talking about paying bills teaches our kids some super important money lessons. Make them aware of the bills they’ll have to pay. This will help them think about how they are going to budget for these bills. Awareness is the first step in helping them control how large their future bills will be.

Why not get your kids to write out all the bills you have to pay? This is probably a good exercise as it will help you fully appreciate the amount you are spending.

Our role as parents should be to prepare our kids for the real-world and, therefore, we need to help them understand that bills form a big part of their financial future.

Thanks for reading!


Here is a recap of the links mentioned in this weeks' blog:


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