How to Teach Your Children to Be Financially Disciplined

Students who are financially literate are more likely to complete higher education. But with so many temptations around them, instilling in them financial discipline is a lot harder than it used to be. So how do you make sure they spend their limited cash with all the discipline of a wizened parent?

Well, it starts with the lessons we give them at home. Part of being good with money is understanding the value behind it. And there are lots of ways to help them develop that knowledge at a young age. We suggest considering the following steps and then doing whatever works best for your family.

Goal Setting

Self-control is central to any form of discipline. When it comes to kids, though, that quality can sure be in short supply sometimes. Setting short-term goals when they’re little teaches children how to delay gratification. Parents can easily tweak activities to help even their elementary school-age kids develop money organizing skills in age-appropriate ways. When you talk to them about setting financial goals, you’re setting them up to succeed.


Allowances are a tried-and-true way to put your children on a smart path to money management. Maybe start with small amounts so they understand this is about saving, not immediately spending it.

Visuals are always helpful, especially with the younger ones. Hang a chart on your refrigerator to mark their spending each week or month, and have them tally how much is left. Money amounts in a visual format can show them how money grows over time. They’ll gain basic math skills, which can help them with bigger budgets later on.

Create Saving Habits

It’s never too soon to teach young people about smart saving habits. When your child puts coins in a piggy bank or savings jar, she is also learning to delay gratification. These skills are about more than money discipline. As she grows, the same child will understand how to set longer-term spending and saving goals.

Provide Guidance

You don’t have to be a financial whiz to show your child the value of a dollar. Even small, simple steps can teach them about investing in their goals. How do you do that?

  • List Goals. Have them list their saving goals, whether they want to attend a concert or buy candy. You can help them create reasonable goals based on how much money they have.
  • Use Chores. Why not work into your allowance plan small chores such as clearing the table or helping with laundry? After all, the best way to learn the value of money is to earn it.
  • Set Expectations. Some chores might be expected, but others could be allowance-based. Make sure they get the gist of allowances, chore plans, and any other plans.
  • Give Praise. A little positive reinforcement goes a long way. Talk to them about the financial lessons they’re learning and comment on positive habits they’re building.

Teach Budgeting

Has your child ever asked for a toy that was over-budget? This is the perfect opportunity to explain basic budgeting concepts to them. Give them the opportunity to save their own money and earn the toy over time, perhaps by doing extra chores. Make sure they keep a record of their savings so they can watch the amount build toward the goal of buying the toy. This will help them learn to save when they want to make a bigger purchase.

Prepaid Debit Card

As kids get older and save larger amounts of money, a prepaid debit card can be a great way for them to keep track when they spend it on lunch or school supplies. Prepaid debit cards and apps allow parents to transfer money to their kids or pay them interest on money stowed away in savings. There are no extra fees or interest charges. Your teenagers will know exactly how much they’ve spent and how much is left.

Just make sure they have the necessary self-control first. Children should come to understand that they’re responsible for their finances and can’t always rely on their parents. But whatever your plan holds, have fun with it. Your kids will learn the satisfaction that comes with saving money and reaching their financial goals.

At Community Financial Service Centers we understand the value of teaching kids about financial discipline and other money lessons. To set up a prepaid debit card or take advantage of our many financial services, find the nearest CFSC location to you and stop on by.

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