Teaching Your Kids About Money: 4 Mistakes You’re Making Right Now

teaching your kids about money

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Nobody enjoys talking about money. The prospect of talking to your kids about it can be terrifying. Maybe you want to shield them from this stressful topic or maybe you tell them that asking about money is impolite.

But keeping money a secret from your kids doesn’t make sense in this day and age. And worse, it could have lasting negative impacts on them when they grow up not knowing how to handle their money. Avoid these four common money mistakes with your kids and give them a solid financial foundation they can build on in years to come:

1. Not talking about money until they’re “old enough”.

Did you know that a study by the UK’s government-sponsored Money Advice Service showed that adult money habits are set by the age of seven? If you don’t talk to your kids about money while you can, the next thing you know, they’re all grown up with a lot of debt and no savings because you never discussed money with them.

Solution: Teach your kids about money, no matter what age. There are guides online for age-appropriate money talks, so if you’re not sure how to talk about money with your child, just do a little research. And make sure you lead your children by example by making good financial decisions yourself.

You can also start teaching kids about money by slowly involving them in small financial decisions you make, like saving money at the grocery store. “The sooner parents start taking advantage of everyday teachable money moments (for example, give a six-year-old $2 and let her choose which fruit to buy), the better off our kids will be,” says Beth Kobliner, creator of “Money As You Grow”, a site that helps parents talk to their kids about money. And when they’re older, you can share with them the household budget so they know where your money is going, and learn the importance of budgeting.

2. Overusing credit cards.

overusing credit cards

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This kid can’t believe the interest rates on his mom’s credit cards.

If you keep using credit cards to pay for everything, your kids will get the idea that a credit card is a magic tool that lets you get anything you want, with no consequences. This is an unhealthy attitude towards credit cards that you should fix immediately.

Solution: When you use your credit card and your kid asks about it, explain how it works, like “This card doesn’t give me things for free. I can use this card because I pay the bill every month. If I don’t, I have to pay the bank extra, and that’s called interest.”

To teach them even more, if they’re in their teens and you think they can handle the responsibility, sign them up for a supplementary credit card and set them a low limit. Have them pay the bill every month with money they earn from their allowance, part-time job, or cash gifts from relatives. Seeing their bill and paying for it will teach them how interest rates work and how they need to handle their spending.

3. Not saving.

not saving

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If you don’t teach him what to do with money, he might just eat it.

Filipinos are saving less and less. One study shows that the average Filipino household saves only 5% of their income. If you’re not saving, your kids won’t be either. If they don’t save now, it will be harder for them to develop that habit when they’re older and already set in their ways.

Solution: Teaching kids about money saving? Set an example for your kids by showing them how you save, like setting up a visible saving jar, or taking them to the bank when you make deposits. This way, they’ll learn that saving is a normal thing to do, and they’ll start doing it. And open up a kiddie savings account for them, like a BPI Jumpstart Savings Account (for kids 10 to 17) or a BDO Junior Savings Account (for kids 12 and under). These accounts have much lower initial deposits required (P100) than regular savings accounts, and will give your kids a sense of responsibility over their money.

4. Not having your kids set short- and long-term goals.


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We’re not sure what this kid’s goals are, but it sure looks like he’s achieving them.

Teaching your kids to save is all well and good, but when you don’t give them something to save towards, they’ll get frustrated because they’ll feel like they’re saving for no reason. This frustration can derail the good money habits you’re trying to instil in them.

Solution: Set your kids short-term financial goals to start with (like, save for the price of a movie ticket in a week so they can watch a movie with their friends), so that they learn the importance of reaching a goal.

Once they’ve achieved a few short-term goals, you can level them up to longer-term goals, like saving up for a bike, a new Nintendo 3DS, or whatever else they might be interested in. For the more expensive goals, give them an extra incentive by offering a certain amount to help: for example, if their goal is to save up P5,000 for a bike, offer to contribute P1,000 once they’ve reached P4,000.


There’s a great value in teaching your kids about money. Avoid these mistakes, your kids will learn the importance of treating money right. They’ll develop good money management skills, self-discipline in achieving financial goals, and a greater sense of control in handling money. Even before they leave your home to go out in the real world, they’ll already know what to do to be financially healthy. It will take some time, but you and your family will be all the better for it. Teach them the basics, and the rest will fall into place.

You can use our handy comparison tool so you can compare savings accounts in the Philippines and select which one matches your requirement.

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