Teaching Kids Financial Discipline

Kelly Curtis - Professional speaker, writer and counselor*** Monthly Feature Column ***

Positively Speaking
Building Assets in your Kids

by Kelly Curtis, M.S., author of Empowering Youth: How to Encourage Young Leaders to Do Great Things.

The housing market is down. Unemployment’s on the rise. Yo-yo stocks aren’t helping the economy either. We’re going into winter with an expected 15% increase in residential fuel costs.

And the holidays are upon us.

Since a lottery win is unlikely, what we may need most from Santa this year is a lesson in financial discipline.

Search Institute has identified Responsibility and Planning and Decision-Making as two of the 40 Developmental Assets. Research shows these are characteristics of healthy, caring, resilient kids. The more assets youth have, the more likely they’ll resist risky behaviors in the future. And financial discipline is one of the ways we can demonstrate these assets.

We could blame our financial derailment on the credit card companies, the marketers, or those darned Joneses, but the bottom line is that we are neck-deep in a philosophy that stuff is an absolute necessity – a lot of it.

For parents of teenagers, it may be a tall order to dial down the materialistic needs that crop up every time their friends get a new gadget. But if your kids are young, it’s not that hard to correct this philosophy. The toughest part is becoming disciplined ourselves.

There are many ways to improve our financial discipline.


Create a budget. For many people, half the battle is admitting we have a finite number of dollars to work with, despite the fact there may be a dozen credit cards in our wallets.

Use paper, not plastic.
Cash insists we stay within the budget we’ve planned for.

Save to spend. If you have your eye on a must-have camera lens, make a personal savings plan. Use auto-transfer into a special savings account, or open an Ing account that bears above-average interest.

Give up something to get it.
Consider simple sacrifices that could help you get what you want. Our family quit cable with ease in September, and we’ll decide as a family what we’ll buy with the monthly savings.


Make miniature managers. Let them manage money. Whatever system works for you is fine, but somehow kids need to have money in order to learn to be responsible with it. The key is to establish a situation where they’re forced to make choices – without parental bailouts.

Save to spend.
Their “auto-transfer account” may resemble a porcelain pig, but the philosophy is the same. They need to decide what they really want, then delay the purchase until they have the cash.

Discuss marketing.
When my kids buzz about the commercial they just saw, I respond, “Those advertisers really know what they’re doing, don’t they?” Candid conversations about the way marketing works will help introduce a discussion about financial responsibility.

Give up the power. When friends have something your kids really want, use this as a conversation-starter for how they will manage their money. “You really want one of those. How are you going to get it?” If it’s truly a priority item, there are usually a few ways to save – birthday, Christmas, or extra chores to name a few. But when your kids realize simply wanting something won’t make it land in their lap, it may magically become less important.

How do you teach financial discipline to your kids?

Thanks for joining in to build assets in your kids! Please join me next month for part two of Financial Discipline: Cost-Saving Ideas for Christmas.

Kelly Curtis is a Wisconsin school counselor and author of Empowering Youth: How to Encourage Young Leaders to Do Great Things. To read more about Kelly, please visit her Weblog, Pass the Torch or follow her on Twitter.


  1. says

    Great article! Thanks for sharing!

    I remember once standing in line at Wal-Mart behind a woman whose 12 or 13 year old son was whining about not getting a guitar that he wanted “Right Now!”. The thing cost $150 and the poor mom was looking a little embarassed about how demanding her son was being.

    I just leaned over to the son and said, “In our house, that guitar would cost you 300 loads of laundry. I could hire you, if you’re interested.” Shut him right up.

    I think it’s important for kids to really appreciate what things cost — it needs to be tangible to them. $100 just doesn’t seem like as much as 200 loads of laundry or 200 windows, does it?

    Anyway, thanks again for a great post!
    — Rebecca

  2. says

    We have each of our four oldest kids on a “budget” (ages 11 and up) where they have a pre-paid spending card for their clothing, shoes, and socks. They don’t get very much each week, so they have to save up for what they need/want.

  3. says

    Great topic! Financial discipline is such an important skill to teach kids.

    Our boys earn money every week using an incentive chart that we post on the wall. After being paid their wages, they learn to tithe, save, spend, and invest. They comparison shop from store to store and put money in the bank when they accumulate enough.

  4. says

    When it comes to big ticket items, our 12 year old is normally happy to save up for the item himself because he knows that we can’t afford to just pop out to the store to pick up whatever the latest fad is.

    Sure we have problems now and then with him wanting to flit his money away on silly things and occasionally we do say it’s okay because I think it’s important for him to realize just how quickly the money will go.

    He knows that I will not pay $200 on the latest pair of shoes that according to him ‘all’ the kids are wearing, so at the moment he’s desperately trying to save for them. I know by the time he’s saved the money, those shoes will be out of fashion and something else will be in.

    He purchased his own Wii – after trading in the Nintendo that he also saved for and saving enough cash. He’s also managed to purchase a few other electronics.

    He’s also saving for a new cell phone. He lost his last one, drowned another in the baby pool by accident, drowned a 3rd in the washing machine after leaving it in his pocket (hubby doesn’t check pockets when he does the laundry) and had 2 stolen at school. We were tired of paying for new phones. He’s not happy about purchasing his own, but we feel that seeing as he’s saving for it, he will be more careful with it in the future knowing just how long it took to save for and not wanting to do it all over again.

  5. says

    Kelly – insightful as always! Your list is very helpful!

    My kids are used to being on a budget, but the belt’s gotten even tighter these days! We have frequent discussions about the difference between wants and needs.

    My two older kids plan their breakfast and lunch menus for the week so they can help with managing the food needed for the week. My youngest (just turned 10!) is doing her best to follow their example.

    We also are making sure we only run the washer or dishwasher when it is full! Something that can be very challenging for teenagers learning to do their own laundry! Conserve, conserve, conserve… :-)

  6. says

    I’m responding to this post a little late, but I thought I’d chime in for those who encounter this by searching. I believe that an essential tool to teaching kids financial discipline is allowance. I don’t believe they should be tied to chores, but there are many who do. Whatever you do, use an allowance and, most importantly, don’t use it as a disciplinary measure, but rather only as a tool to teach kids the value of money.

    Creator and Chief Money Mammal, “The Money Mammals”


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