Want to teach your kids financial independence? Here’s how mine did!
“Hey Mum, this is my friend Daniel from school.”
“Nice to meet you, Daniel, and welcome to our home! Joel, do you want to wash the dishes, hang the laundry, or vacuum the house?”
“Ah, Mum… Daniel came over to play. Can I pleeeeease skip my chores today?”
“Nope. If you live in this house, you must do chores. Sorry Daniel, that’s the way it is around here.”
“OK, fine. C’mon Daniel, it’ll only take 10 minutes to bust out these dishes and then we can go practice skateboarding in the driveway.”
Teaching Kids Independence: Financial or Otherwise
I can’t thank my parents enough. Growing up, what I called “torture” at the time was actually just stellar parenting. The lessons my Mum and Dad ingrained in me back then gave me a huge advantage today. They taught me how to think, live, and thrive independently.
I am by no means perfect, and I’m sure my parents would say they did a bunch of stuff wrong when raising me. But, I became self-sufficient very early in life, and that made me confident in taking care of myself and gave me a good start on my journey toward financial freedom. Here are some fun stories from my childhood:
Lesson #1: Everybody Works. Life IS Work.
No matter how much I complained, negotiated, or pretended to be sick, my parents would never let me out of doing daily chores. Mum put a chore chart on the fridge with a morning and an afternoon task for every day of the week. These mandatory chores started when I was about 6 years old and continued until I moved out at age 22.
Dishes, laundry, washing walls, scrubbing toilets, vacuuming, making dinner for the family, changing bed sheets, gardening, car washing … You name it — my siblings and I did it. There was no compensation, weekly allowance, or reward for these jobs. It was just the cost of living.
Of course, I thought this was horribly unfair at the time! My friends at school would get paid $5 by their parents to clean their room once in a while. I was paid $0 for 10 times as many chores!
But, all this manual labor taught me a solid work ethic. I learned how to do things myself, without dependencies or hired help. When it came time to move out of home and run my own household, it was an easy transition.
Lesson #2: Independence vs. Interdependence
Learning how to take care of yourself is important. But, learning how to *also* take care of others and contribute to a community is equally important. Looking back, the household chores my parents made me do went way beyond cleaning up after myself.
When I helped prepare lunches in the morning for our entire family, everyone benefited. It meant someone else was going to help make my school lunches the week after. When I folded 7 loads of family laundry, it meant that one of my siblings was vacuuming that day so I didn’t have to.
If everyone pitches in, everyone benefits.
Personal independence is important, but Mum and Dad made sure my siblings and I grew up contributing to a society that also took care of us in return. That’s how the real world works. We should all contribute, according to our means and capacities.
Lesson #3: Personal Responsibility
Here’s a few things I remember growing up…
- My parents didn’t let me drive their car until I showed them a bank account statement with an $800 balance. This was the deductible for their car insurance policy.
- If I went out with friends on a night when it was my turn to make dinner, I had to buy take-out for the whole family with my own money.
- If I slept in and was late to school, my parents threatened to charge me $6. This was the per-day expense they paid for my school at the time. (Honestly, I don’t recall them fully enforcing this. I could be wrong). They saw my education as an investment, and if they let me sleep in without consequences, it would demonstrate that the investment had no value. Charging me for missed school meant me owning responsibility.
- When I made a commitment or set a goal, they would hold me to it at all costs. Well, reasonable costs :)
These stories might seem harsh. But they were all blessings in disguise. As a kid I was held to the same personal responsibilities that most adults live by. (Actually, I still don’t think many adults have enough $ in their checking account to cover their car insurance deductible. WHY are they driving!?)
Lesson #4: Financial Responsibility: The “Bank of Mum and Dad” Doesn’t Exist!
My parents would cover the basic costs for us kids, but they weren’t going to fund an excessive lifestyle. They bought us clothes, but if we wanted anything ‘designer style’ or if we wanted fancy sports gear, we had to chip in and buy it ourselves. They encouraged us to earn our own money.
From about age 14 onwards I was earning about $50-100 per week working at McDonald’s. I could afford my own movie tickets, skateboards, games, and after-school activities or clubs. (I remember that I paid $10 a week for breakdance lessons on Tuesday nights after high school. Don’t laugh — breakdancing was cool back then!)
In my later teens, my siblings and I each paid my parents $10 per week for access to their car when they weren’t using it. At age 18, my parents started charging me rent to live in my own room! (According to Mum, after high school I showed no signs of “moving on” — so she increased my cost of living to encourage me to work/earn more.)
You might be wondering if my parents were trying to make a profit off us kids! It’s actually the opposite. They gave us everything they could. By slowly introducing living expenses, I learned money management skills and became a self-sufficient adult child sooner rather than later. I also learned that if I wanted the finer things in life, there was no entitlement or financial help. I would need to get off my butt and earn stuff myself.
Honestly, if Mum and Dad never forced rent on me, I would have never moved out. In fact, if they’re willing to take me back tomorrow rent-free, I’ll start packing tonight! ;-)
Lesson #5: Budgeting and Money Management
My parents taught me to keep a detailed ledger for every cent I ever earned. 10% of all income went to charity, 45% went to piggy bank savings, and 45% I could spend however I wanted.
If I earned $2 cleaning the old lady’s gutter down the street, I would have 20 cents for charity, 90 cents for my savings account, and 90 cents to buy candy :)
Mum and Dad were pretty open about their own budget. They showed me how they pay bills (with a credit card to earn points, then pay the card off immediately with cash). They took me to meetings at our credit union. We sat down to review phone bills together, grocery receipts, and my Dad showed me how to file tax returns manually.
I remember hating all this at the time … it was like extra math homework! But it taught me financial literacy and prepared me for budgeting in the real world. I’ve never been in debt, my income has always trumped expenses, and saving money has always taken priority over spending.
Lesson #6: Cooking and Grocery Shopping
Recently, one of my friends asked me how to cut an onion. This person is in their late 20’s, and had never cut one before. At first I thought it was a joke … but they were dead serious. Making meals using raw materials was hard for them because they never learned to cook growing up.
I remember my Mum taking me and my siblings to the market and different food stores each week. She showed us which shops had the cheapest deals for meats, vegetables, milk, etc. She taught us how to cook meals for the family like lasagna, shepherd’s pie or baked meat and vegetables.
Learning how to cook gave me freedom as a teenager, and it helped me financially as a young person. Teaching me and my siblings how to cook also freed up my parents because we were not dependent on them for every meal.
Caveat: I’m Not a Parent!
Being a parent is the hardest job in the world, I can only imagine. My wife and I don’t have any children right now, so I can’t really say from experience how to teach kids financial independence.
But I did learn about financial independence from my parents, and I’m sharing these stories because it’s a frequent topic in our financial freedom community and I wanted to give input based on personal experiences. If/when I do have my own kids, I’ll be trying my best to pass down some of these financial lessons I was taught by my awesome parents.
I certainly had a privileged upbringing. One that I’m so thankful for. My parents are still married, happy, and our whole family has a very close relationship, even though we live on different continents.
What personal finance lessons were you taught as a young child? How did your parents teach them, and did they give you a head start on your journey to financial independence? If you have kids, how are you teaching your children about their financial future?
**Family photo up top is from ~30 years ago at the 12 Apostles off the Great Ocean Road in Victoria, Australia. I’m the one hiding between Dad’s legs :)
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Joel,
This is a great post. I couldn’t relate more with you on your Lesson #4 – that the Parental Bank does not exist. My parents also taught me this very important concept at an early age. Although I may not have seen the value in the lesson when I was young, I am very appreciative of it now. I understood the value of $1 far before many of my classmates realized the value of a dollar. Because my parents engrained this idea in me, I truly believe I have become more financially independent because of the lessons I went through early in life.
Thanks again for sharing!
I spoke to my parents recently about this… They said it was easy to not give us money as kids – because they didn’t have any extra to give! We were a single income family with 4 kids, so spoiling us children would mean going into debt, which they would never do. I think about this for my future kids, because I probably have the resources to spoil them (and I certainly want them to have the fine things in life), but resisting will be very hard because I have more resources than my parents did. Glad to hear you had a similar experience and see how big the value was.
Thanks for reading!
I love the insurance deductible thing! If I had children, I’d totally add that to my arsenal!
Sounds like your parents did a bang up job in general!
I am thankful for my own upbringing too, and especially now that I’m married because I see how crippling my husband’s lack of guidance and discipline growing up was. My parents always taught me the value of a dollar. If I wanted something like a toy, I had to use birthday money or wait until they were willing to pay for it. And I had to be really sure I wanted it. My dad called this the “gift of want” saying it was more enjoyable to get something you’ve waited for. I didn’t get an allowance either and was expected to help out. My parents didn’t call them chores but if my mom was cleaning the house, it wasn’t a question that I had to participate. Or help clear the table and wash dishes. Or cook dinner. In contrast, my husband basically wasn’t expected to do anything or taught to do it—and to this day (I’m his 40s) I’m like “wait, you never did this?” It’s mind boggling. I also get the impression his dad often caved and gave him what he wanted or bailed him out of jams he got himself into financially with no consequences or just took care of basic things like bill paying, well into his 20s and 30s. I’m not trying to belittle my husband or his dad—they are both lovely people with many fine qualities. But I definitely appreciate being independent and confident in my own abilities to take care of myself and others.
Thanks Christine! I can’t imagine how hard parenting is – I guess I’ll find out if/when I have kids. But it seems like there’s a delicate balance between supporting your kids and letting them fight all their own battles. Leaning too much either way can have detrimental effects later in life. On a good note, it’s awesome that your strengths compliment your husbands, and his probably compliment yours. :) My wife and I come from different money backgrounds, and I like to think we learn new things from each other all the time! Thanks for reading and sharing!
Great Post Joel. I have a 3 year old and a 4 month old and I’m still trying to figure out how to best teach them about life, money and finance. I’ve heard about the marshmallow test and will soon be trying it out on my 3 year old. You offer a marshmallow or a favorite small candy to a child close to bedtime. You tell them to keep it and if they can hold on to it overnight, then they can get four more marshmallow/favorite candy the next day. It’s a test about delayed gratification and patience. I have also earmarked a few books on the subject about how to teach children about money and finance and have learned a lot from reading your blog. I’m still trying to figure out this parenting thing.
Growing up my parents also charged me rent when I was in college and med school. I couldn’t understand at the time why they made me use by high interest student loans to pay rent, but the fact of the matter I would have had to pay rent somewhere and it did get me into the habit of paying bills. Which is a habit I still can’t kick.
You’re starting them young, Frankie! Wow. I’ve heard of the marshmallow test – let me know how it goes!
A similar thing you could try as they get older is matching dollar for dollar any savings they put away for xx period of time. Kind of like a kid’s 401k. It gives them the concept of “free money”, which can be earned by saving their own and sacrificing spending on the things they want.
Great to hear your parents charged you rent also. Makes me feel more normal. Are you going to charge them rent one day when they are old and living in your house? Haha it’s payback time.
Hi Joel…just wanted to let you know you are doing a great job..I enjoy reading your articles…keep up the good work!
Cindy in Montreal, Canada
Merci, Cindy! Thanks for the kind words, it means a lot. Notes like this encourage me to keep writing and sharing. Have a great week!
It’s pretty cool that you think of standard life lessons as also financial lessons. People often complain that parents don’t teach kids about finance, which is true. That being said, the basic principals of finance are no so different than those for life in general.
Yep, I agree. Baking and cooking teaches kids math and percentages. Teaching delayed gratification has a big impact on finances too. I wish personal finance was taught more in high schools, although it would be hard to standardize I guess.
My parents paid me $10 a week to do chores, which was decent. It was enough money to go and buy slurpees from 711, but not enough to buy larger things I wanted like a dirtbike!
Haha. The 711 and convenience store got a lot of my business over the years too :) I remember the day when my older brother worked out that instead of us both buying a can of Coke for 50c each, if we combined our money together we could buy a whole 2L bottle of coke for $1 and have double the amount to drink! He was a legend for figuring that out.
As someone who lent her parents money for a bankruptcy lawyer, I cannot relate to this article at all, lol. I mean, what’s this thing about a Parental Bank??
You might have just coined a new term, “Bank of Kids”. It’s when kids pay for their parents expenses!
On a serious note, I’m sorry you had to go through that with your folks. I guess teaching financial lessons goes both ways with kids and parents!
Thank you so much for sharing this! Your parents are brilliant, by the way.
Thanks Amy! Yep, they are superheroes for sure. Actually, I didn’t even share the half of it… More stories to come!
Joel – I can only hope that my two sons will learn as much from us about finances as you learned from your parents!
And how many people can make this claim? — “I’ve never been in debt, my income has always trumped expenses, and saving money has always taken priority over spending.” — A true testament to the values your parents instilled in you. How different would our world look if more people could make this claim?
My wife and I have a 4-year-old son and a 7-month-old son. We have just started the process teaching our 4-year-old about the concepts of money. We have given him three jars labeled – Give, Save, Spend. I also went to the bank and got one of each denomination of currency to teach him how to identify a $1 bill vs. a $100 bill, etc., and teach him the different values, etc. We are just in the very beginning stages but our son has really shown an eagerness to learn, which is exciting!
Great post! Thanks for sharing this story.
That’s AWESOME Jason. I love the jars! Something they can watch grow and be proud to contribute to.
I remember my parents taking me to the local credit union and opening my first bak account. I was probably 10 or 11. I handed the teller all my “savings” I had collected over the years (probably just a few $), and in exchange they gave me a little yellow book. It was a ledger and balance sheet with ruled lines and columns. From that day forward, my “jars” for Give/Save/Spend were all virtual buckets. I learned to manage transactions and cash on paper, vs. physical cash. That was a HUGE advantage for me – keeping exact records is a great habit for kids. They might hate doing it while they’re young – but boy will they reap huge benefits later in life :)
I grew up with a single mother and as a kid I always wanted to help her out. When I saw she was stressed, my desire for a new costly toy disappeared.
I think parents who are honest with their kids and talk about finances (plus truely how much money they have) have more money conscience kids.
-Andrew
Thanks for sharing Andrew. Yep, even the smallest conversations about money have big impressions on kids.
I love this post.
As a nanny, you just don’t see this kind of parenting anymore. Its sad. The kids that come from wealthy homes have no chores to do and parents wonder why their kids talk back to them!!
I have your onion story beat…I met an adult lady that didn’t know how to boil an egg.
My biggest (financial) impression watching my parents was never seeing them leave for the day to run to a stupid 9-5 job. My parents were farmers and were home to raise us. We ate every meal together except for when i was in school.
Cool to hear you always had your parents around to learn from! Eating meals together is a great childhood memory. That’s where most of our discussions and learning happened – conversations around the dinner table :) Thank you for your work as a nanny. Tough gig!
You are far from the only one who had lesson 1. Me and my brothers always had chores, technically still do today. My little brother moved back in with my parents after his contract was up for a month and he told me over Zoom that they had him move 4,000 pounds of rocks.
Normally, someone would tell him not to exaggerate. However, we did demolish a concrete sidewalk and remove the concrete from the house. I do not remember the measurements, but I will assume that there were 7 cubic meters of concrete a cubic meter of concrete weighs about 2,200 lbs so we moved around 15,400 lbs.
My response: “yeah that sounds about right.”
Nothing like doing a few (very) heavy chores to open you up to work that makes you sweat and sometimes bleed for money.
Hey Papa! Manual labor is definitely a good thing for kids. And also good for adults! Same thing when I visit my parents – I just start helping out around the house wherever I can. Have a great weekend!
Hey Joel! As a HUGE fan of your email list, I had to check your stuff out over here, too. LOVE this post!
I don’t feel like I grew up with the world’s best personal finance skills. My Dad handled it all at our house and was very particular and skilled with it himself..but he didn’t really have patience/ take time to “teach us his ways” exactly. I also worked from age 14 on (at McDonald’s, too!) and did a decent job of always spending less than I earned, plus my sister and I had to pay for our own car insurance, gas, cell phone bills, etc. However, I didn’t really develop some of the bigger picture skills and honestly I still get easily confused by personal finance stuff today.
As a mom now, we have our boys do chores and all of that, but they still live a pretty generally privileged lifestyle overall. I worry that they don’t truly appreciate it and I want to work on teaching them more about money management. We do give them an “allowance” (not directly tied to their chores, but they still do have to do chores), but I don’t think we have taught them the best system to monitor their incomes/expenditures at this point. They more just look and see what they have and go spend it. Haha. I’d like to work on longer term savings goals, etc. Great tips here!
Thanks Kae! I’m a fan of your blog too! Gratitude is the key to happiness :)
One value that’s an overall winner for kids is delayed gratification. When I was about 9, my parents offered me $100 if I went without chocolate for a whole year. That was more money than I could even fathom at the time. So I took them up on the bet… Do you know how hard that is for a 9 year old to say no to chocolate all year!!?? Hard. I missed cake at parties, easter, and almost every day I was tempted to give in. But I made it the entire year. Actually I did it 3 times! Self control and delayed gratification… I can’t thank my parents enough for making it challenging, and FUN!
So many of those things were so familiar! Growing up, with 4 kids in the house, everyone had to pitch in – like you said – if one person was making school lunches for everyone, someone else was unloading the dishwasher and another kid was washing a sinkful of dishes – there was plenty of work to go around!
I remember when we my younger brother was about 16, his friend D decided to host a party, and D’s mom gave him a budget for food, drinks etc. My brother went with D to the grocery store, and they walked through the produce section. D grabbed a pineapple, (in November) and decided that it would be a great centerpiece for a massive fruit platter! As he kept putting various exotic fruits into the cart, my brother just rolled his eyes. Eventually he sorted D out – and convinced him that he couldn’t really afford to spend 1/3 of his budget on a decorative centerpiece – but when he got home, he described the whole shopping trip to my mom, concluding “he has NO idea how to grocery shop!”
My mom taught by example – we participated in the family grocery shopping every week – and once we were old enough to drive, we often got sent out to do the grocery shopping on our own.
My first real job was at age 13 – I picked raspberries from 6am to noon every weekday for a month, and earned $100 – enough to pay for half of the boombox that I had picked out that I wanted for my birthday :D
Wow, very similar stories indeed! I will say, most of my grocery shopping skills today were learned from my expert wife. When I met her ~10 years ago she had to re-teach me how to go grocery shopping. I was already decent, but she took things to the next level! The 99cent store, local Mexican markets in LA, buying bulk & splitting with neighbors, etc. Whenever one of us gets a really good deal somewhere we rush home to brag about it to the other :)
Cheers for reading Spiffi – have a great week!