Opinion: Don’t wait to teach your children about money management (2024)

Let’s face it. When children become adults, they won’t just automatically understand – let alone successfully manage – their finances. With April designated as Youth Financial Education Month, it’s a time to be proactive about helping today’s youth with financial concepts before they become tomorrow’s adults. If not now, when? Waiting until children become adults to discuss and teach them about finances and money management is, usually, much too late.

Like most things worthwhile in life, becoming successful at navigating personal finances is a path full of twists and turns, with plenty of bumps thrown in for good measure. In the journey toward financial wellness, mistakes are not setbacks; they are stepping stones to growth and understanding. When it comes to children and finances, allowing them to make mistakes and learn from them is crucial for their long-term financial well-being. In a society where financial education is often overlooked, empowering kids to navigate their financial journey with resilience, knowledge and confidence is critical.

Making mistakes with finances provides children with invaluable real-world learning opportunities. By experiencing the consequences of their financial decisions firsthand, children gain a deeper understanding of concepts such as budgeting, saving and spending. Whether it’s overspending on toys and regretting it later or failing to save enough for a special purchase, each mistake presents a teachable moment that helps children develop critical financial skills and judgment.

Additionally, mistakes foster a sense of responsibility and accountability in children. When children are entrusted with managing their own money, they learn to take ownership of their financial decisions and their outcomes. By experiencing both the rewards and consequences of their choices, children develop a greater sense of accountability for their financial well-being. This sense of responsibility lays the foundation for future financial independence and empowers children to take control of their financial futures. Too often, we, as adults (especially parents), want to “fix” things for their children when things get tough, instead of considering the valuable lesson(s) that come from working through tough times or situations.

It is inevitable that children will encounter setbacks and challenges on their financial journey as adults. Whether it’s unexpected expenses, loss of income or investment losses, navigating these obstacles requires resilience and adaptability. By overcoming financial setbacks and learning from their mistakes, children develop the resilience and problem-solving skills necessary to thrive in an ever-changing financial landscape.

Mistakes with finances provide children with valuable insights into their own values, priorities and goals. When children make mistakes with money, they are forced to confront and reassess their spending habits, financial goals and long-term priorities. I firmly believe that financial mistakes made by children are only detrimental if they don’t learn from them.

When children make mistakes with money, it provides parents with an opportunity to engage in meaningful conversations about financial responsibility, goal-setting and decision-making. This includes encouraging them to reflect on their mistakes and considering what they can do differently moving forward. Taking this approach gives children an opportunity to gain a deeper understanding of what truly matters to them and how they can align their financial decisions with their values and aspirations.

It is important to remember that missteps are not failures; they are essential learning opportunities that shape and strengthen children’s financial literacy and resilience. By allowing children to stumble on their financial journey, we provide them with lessons that they can take with them into adulthood. This empowers them to develop critical financial skills, responsibility, resilience and a healthy attitude toward failure. As parents, educators and mentors, let us embrace and celebrate the mistakes our children make with finances, knowing that each misstep is a valuable lesson that brings them one step closer to financial independence and success. With finances, it is OK to let children fall. Helping them up and discussing why they fell in the first place goes a long way to paving a path for financial success in adulthood.

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