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4 Basic Money Principles to Teach Young Kids

Rachel Cruze

Q: What are some basic principles I can teach my young kids before they get older?


Rachel’s Answer:

Great question. Sometimes we make money too complicated.

Managing money is based on one thing: common sense. Despite what you might hear, we all have it!

And the best thing you can do for your kids is to help them start putting their common sense into practice. You’ll do that by teaching them these basic principles of money management:


We talk about it all the time—the most powerful wealth-building tool is your income. That goes for both kids and adults. The 6-year-old you teach to save for a bicycle will eventually turn into a 17-year-old who is eager to save for college.

Pay commissions, not allowances. Your kids get commission for doing chores around the house, like taking out the trash, feeding the dog, and helping with the dishes.


Priorities. Priorities. Priorities. Making money shouldn’t be a license to go spend it all right away. Too many kids and teenagers make $50 and spend it within a day on something they will have forgotten about a month from now.

There’s nothing wrong with having a little fun every now and then using cash to buy something you want. But there has to be a balance.

As a parent, how can you help your child understand how fun it is to spend while also remembering how important it is to save?


If your child heads off to college without understanding the principle of saving, then he will most likely graduate with a lot of debt.

Start early. Use a piggy bank or, even better, a clear jar so they can see their money growing. Once they are old enough, open a basic savings account.


The point of building wealth is to change your family tree and give. The earlier your child gets that, the better they will be in the long run.

Help them pick a charity to support and teach them about tithing. Instead of just giving them a dollar in the church parking lot, let them use their own money to tithe.

These are the basics—simple principles you can teach your kids at an early age.

And, remember, keep reinforcing the importance of working, spending, saving and giving. Don’t simply sit them down for one discussion and leave it at that.

Talk about money as often as they want to, and be available for questions. Before you know it, you’ll be raising a money expert!

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Rachel Cruze

Growing up as Dave Ramsey's kid, Rachel Cruze learned the basic principles of money at an early age. She travels across the country teaching those same principles, in a personal and passionate message of money and hope, to teens and young adults. To find out more about Rachel, visit or follow her on Twitter at @RachelCruze.