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Talking to Children About Money

‘Tis the season, whether you’re ready for it or not.

In the countdown to Black Friday, dog-eared catalogs begin to litter the kitchen counter. Temper tantrums erupt from shopping carts everywhere. And for families with older children, Amazon wish lists mysteriously appear in parents’ inboxes.

The holidays seem to arrive earlier and earlier each year, with advertisements everywhere pushing the latest, greatest thing. But parents can turn the pressure to “buy, buy, buy” into a learning opportunity for children that will last for a lifetime.

We find the three-bucket approach—save, spend, and give—to be a powerful tool to show children how money works and how to manage it.  Every time children receive money, whether it’s via allowance or gifts, have them split it out into these three buckets and take any opportunity to talk about their money plan.

The holiday season gives a natural opportunity to talk about how money can be used. Even for adults, these concepts can be abstract, and for children, the three-bucket method allows them to really see where the money goes.  


Both children and adults are guilty of spending money as if it will go bad. Instilling the idea that spending needs to be planned is an incredibly valuable one.

Each family is different in how they handle allowance and which things children are expected to pay for, but when you tell children that just a portion of their money should be used for spending (as opposed to all of it), they will become more aware of the need to save up for spending goals. 


When children are young, you can help them decide whether to spend now on small items or save up for later spending on more expensive toys. You can also pay “interest” on money saved as an encouragement. As children get older, their saving goals can become more adult, like saving for college, a first car, or even an investment account, which opens up further learning opportunities.

For young investors, a great way to spark interest in the stock market is to buying one or two shares of individual companies that your children enjoy. You can track the news about this particular company and watch the ups and downs of the stock in reaction. 


Children really enjoy giving to causes they feel a connection to, like the local zoo or animal shelter. But giving time can be just as impactful to instill the value of generosity. A great tradition to ring in each holiday season is for the entire family to sort out old clothes and toys for charity, then take the family to a homeless shelter to donate items. Generally, the staff or volunteers will help to make the giving experience personal by sharing stories about the individual people who their gifts will be helping.

How to Implement

There are many tools out there to help families teach children about money. Some, like piggy banks divided into sections for spending, saving, giving, and investing, are great to help younger kids visualize where money goes and how it grows over time.



For older children and teenagers, online apps can help your family to manage the logistics of asking for and spending money.

FamZoo has the sleekest interface for virtual family banking if you have children aged 13+. Parents can set up accounts to track allowances, rewards for chores, spending, investing, and giving. Children can request spending money or suggest odd jobs to earn money.  However, there are fees associated with prepaid debit cards to be aware of.

ThreeJars.com has a similar offering to FamZoo, where parents deposit money and children can make requests, but it only uses an IOU system, which avoids fees but involves more hands-on management.

We hope these resources help you instill valuable money lessons to your children. Don’t hesitate to reach out if you have a question or would like additional guidance in one of these areas.


Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from Halpern Financial, Inc.. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. Halpern Financial, Inc. is neither a law firm nor a certified public accounting firm and no portion of the blog content should be construed as legal or accounting advice. A copy of the Halpern Financial, Inc.’s current written disclosure statement discussing our advisory services and fees is available for review upon request.

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