How Can Kids Learn About Money Without Allowance?

Unchooling | 0 comments

At this point, we don’t give our children allowance. Partially because our budget doesn’t allow for it and partially because we don’t see a need for it.  The most common objection we hear regarding this decision is “But how can  kids learn about money without allowance?”

Before I had my first son, I was in the financial services industry for several years. I taught people how to make and how to save money and sat down with a lot of people to help them figure out budgets and retirement plans. It was right up my alley as I had been tracking my own cashflow from the time I was able to count. I was pretty particular as a child and it seems to have paid off in the long run.


My husband began working outside of his family farm when he was about 13 or 14. He borrowed his dad’s quad and worked for various neighbors. He learned quickly the importance of financial planning as he wasn’t the most responsible with the quad and ended up spending a lot of money on repairs. Instead of driving saner (which would have been my first choice) he started saving a portion of his income for quad repairs so he was always prepared. He eventually saved up enough for his own quad and, a couple years later, his own brand new car.


When we got married, we had somewhat different outlooks on the final purpose of money (I was more of a hoarder saver and he was more of a spender) but we both understood the importance of budgets and paying bills on time and not spending money you don’t have. We may have been only 19 at the time but we set up our retirement plan and monthly budget within a couple of weeks of our wedding. That attitude has served us well over the years.

Our parents chose to talk about finances when kids were around so we heard a lot of things growing up that helped us understand how money works.

How does this roll into our parenting journey? Dinner table conversations. Our parents chose to talk about finances when kids were around so we heard a lot of things growing up that helped us understand how money works. They talked about which bill to pay when and how to make sure there was enough in the bank at harvest time to pay custom bills. We overheard conversations about whether it was best to continue fixing the old tractor or invest in a new-to-us tractor. Our parents talked about whether it was better to go into debt to invest in livestock which would make the farm money or whether we should wait until we could pay cash.


Our kids now hear many of the same conversations. As they become older and more capable, they’ll be invited into the office to help pay bills. They’ll learn how to write cheques, read balance sheets, make budgets and cashflow projections, reconcile bank accounts etc. They’ll also learn the difference between good debt and bad debt and how to figure out when to go into both. They are already around when we meet with accountants and have seen us discuss financials with my parents (whom we farm with). I know that our eldest hears everything because sometimes he asks very specific questions after our business meetings. Just yesterday he sat beside me and asked questions as I went through my weekly financial review.

As someone who has seen the financial state of many young families and the lack of understanding when it come to basic principles of money management, I’m reminding you to please involve your children in your finances from a young age. The best way for them to learn is to witness those principles applied in real life situations. It may feel unnatural to involve your children in something that many feel should be private, so start small. Perhaps they could stuff envelopes at bill paying time. If they are older, you could show them how to pay bills online by letting them read the statement and enter the numbers. Maybe you could put your children in charge of recording expenses. However you start, you will never regret teaching them how household money flows.

Do you have any other tips or stories to share about how kids learn about money without allowance?

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