4 Pitfalls To Avoid With Kids

Apr 23, 2024 Family & Finances

Do you know what message you’re unintentionally sending to your kids about money? Find out which four money behaviors commonly give the wrong impression.

A woman and a young child at the grocery store looking closely at the shelves.

There are no set rules when it comes to teaching kids about money. Of course, all parents and caregivers will approach educating them differently.

Whether it’s intentional or not, we often teach those around us by doing – or not doing. Here are four money behaviors that can send kids the wrong message about money.

Pitfalls To Avoid

1. Instant Gratification Is Always Okay

Impulse buys aren’t evil – sometimes that salted caramel latte is needed while out running errands. But if done in excess, kids might get the wrong idea. Don’t let children think it’s okay to spend their cash on whatever’s in front of them at any moment.

To help kids understand why they can’t have everything they want, explain that money is limited. For example, if they ask for something immediately, tell them that you won’t have enough money for something else later. By giving them choices, they’ll learn to prioritize.

2. Telling Them “We Can’t Afford It”

Even if you can’t afford to buy an item, experts caution against using that phrase as a substitute for saying “no.” Be honest with children – let them know you aren’t buying that new bicycle because they have one at home that’s less than a year old.

Also saying, “No, we’re saving for a trip to the zoo next month,” is a great way to let them know that planning, budgeting, and saving are important.

3. No Cash? Just Charge It

Using a credit card for a purchase is easy – too easy. If children don’t understand the concept of credit, cards may look like magic money. Pay attention to how quickly you whip out the plastic and explain the importance of paying off credit card bills every month.

4. Talking About Money Is For Adults Only

Omitting young ones from financial conversations forces them to figure out the concepts on their own. Kids as young as two years old can be given cash to hand over to the cashier when grocery shopping. This will help them understand that you can buy goods in exchange for money.

When they get a little older, try including your kids in conversations about budgets and bills. They’ll become more comfortable talking about money, which may help them manage their own as they get older. Also, seeing how money works will help them understand that there’s not an endless supply of it.


Kids learn by observing. They’re always watching – ready to mimic whatever you do. Just like kids pick up language and values at home, they also pick up money habits. The best practice is to lead by example.

Copyright BALANCE


Two young girls playing on a playground.
Life Guidance for:

Raising Money-Smart Kids

Talking to kids about money is not only acceptable but also encouraged. Use our tips to help your child understand and practice age-appropriate money management skills.

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