Teaching Money Management Skills to Children

Are you sorry for financial decisions made in your past? Do you want your children to make different decisions and learn from your mistakes? My husband and me entered marriage with student loans & debt on credit cards. We accumulated more debt over the next 8 years as we struggled to make ends meet, both from credit card debt and student loans. When you live paycheck to paycheck and have to pay your bills, that time of debt and struggling financially was stressful for our marriage.

We didn’t have a plan for how to break that cycle, so we took a Dave Ramsey Financial Peace University course to help us. We were able to work for many years and pay off all our debts. It was a relief to no longer feel burdened by debt and it allowed us to focus on our savings.

We have learned from our mistakes that it is important to teach our children how to manage money early on so that they can start their lives off on the right foot. Our current system was created to encourage our children to help with chores around the house and also to give them opportunities to earn an allowance. This gives them the ability to manage their money by having them earn an allowance.

This system is great and can be started even at preschool. We started it with my youngest daughter when she was just 4 years old. Although the types of jobs they choose will depend on their age, it is important to start teaching them money management skills as young as possible. As a child, it is easier to learn money lessons and realize that it’s better not to spend your entire money.

“Responsibility” System:

Every house is different and every “chore” system works differently. You have to decide what works best for your family. If you need ideas, I will just share our experience. Our girls get an allowance as I mentioned. However, there are some jobs that come with being part of the family. Our girls are not paid to do all of their jobs, but we do allow them to “work” together around the house to accomplish things.

Our system is simple: you earn $.50 each year of your age. My 12 year old earns $6/wk, while my 10 year old earns only $5/wk. Our chore chart is called a ” Responsibility Chart“. This allows us to focus on the responsibilities each one of us has in order to keep our house running smoothly. It’s a positive way to encourage your children to see it as the responsibilities they have around their house. As they are responsible for their actions, we have also added behaviors to it – respect, listening well, etc.

We then go through the charts and pay the money.

Print your Responsibility Sheet. This is a free printable. You can edit the version to suit your child’s needs and responsibilities.

This is how our Responsibility Chart was divided:

  • Family Duties These are the daily chores like making bed, brushing teeth, cleaning their table, and putting dirty clothes in the hamper. Shoes can be stored in closet drawers.
  • Weekly/Semiweekly Duties These are tasks that may not be performed every day but which can be done when they are needed. You may have to do things like fold laundry, put it away, clean the sinks and so on. If they have an after-school activity, they may not be able to complete some of these tasks. We have this category for them to complete it at least once a week.
  • Bonus Section– Here they can earn additional money doing extra jobs around the house/yard, and we keep track of it all (so that we don’t have the money out right away but it’s kept on the chart for the entire week).
  • Fines Section This section is where we keep track any fines that are due for unacceptable behavior, such as not fulfilling family duties or not being respectful. As another way to keep track, we will also mark the date that a job was not completed in one of the two sections. This will be a penalty. If they fail to complete a job correctly or aren’t able to do it properly, the fine is usually $.25.

As I mentioned, this is just what we do. We’d love to know how your children do jobs/chores and when they started.

Money Management System:

Our daughters have three envelopes in which to keep the money they earn through their jobs and extra work. These envelopes are called Spend, Save and Give. We go through the Responsibility Chart every week on Sunday night. Each week we give the money to our children and help them figure out how much money is in each envelope. Below are details on each one.


They can take this money with them to any activity or store where they may need it. They know exactly how much money they have, and can use it as they wish. This also stops the begging. It’s frustrating to me, not knowing if you are one of them. We let them know that they must bring their own money to purchase the item they desire.

My younger daughter often wanted to buy candy. Even though it isn’t my choice, it is an important lesson. Candy is only temporary. Although she has her moments where she feels compelled to buy candy, she has begun to learn to save money for things she wants to keep longer. My older daughter is more inclined to save money and she sets her sights on the more expensive items she wants and tries to get there (although she still has her impulsive moments). These are great teaching moments where you can show them how to find other options. They can learn about couponing and how to shop the sales. You must pass on the frugal tips to them.


Our children must save at least 10%. You can put more money in this envelope if you wish, but 10% is a reminder to them to save some of their hard-earned cash so that they build up their savings “fund”. They have specific times when they can access their “save”, especially for trips or special visits to the toys store.

We have stated several times that we will match what they have saved if they have a trip in the future. We took a 2 year long trip to the East Coast and knew that they would need some spending money. We told them that we would match their savings if they save at least $20 and we would match up to $50 to encourage them to save money. They could save more, but this was the maximum amount we would match.

We let them know that this was how they would purchase souvenirs on the trip. This account matching would allow them to make the most of their money. It was so exciting for them to be able to buy souvenirs on the trip after having worked so hard for so many months.


This envelope can be used to give to others in order to encourage generosity. It could be used to buy items for Operation Christmas Child boxes or money to go to Salvation Army Christmas boxes. To teach our children biblically-based tithing, and to show them how to give generously to God, we ask that they put at least 10% into this envelope. They will often give more than 10%, especially if they can see how their money can bless others. We want them to feel generous and give back from their hard-earned cash.

Our Money Management and Responsibility Charts have been in use for many years. It has worked well. It’s not perfect, and we often tweak them. However, our girls seem to enjoy having clear expectations and the knowledge that they can make their own money if they work hard. It gives them the chance to save and give on their own, and it allows them to make money decisions early on in their lives so that they can be more responsible with their money later on.

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