How to teach children to work less and earn more?

Do you ever think you could have started investing sooner? Did you wish you had more knowledge about investments early in life? Don’t worry many of us are in the same boat, and wish we had better investment knowledge sooner and started earlier. Then let’s not make our children do the same mistake, let us teach them about money, savings, investments and sharing. So they can develop a good financial knowledge, be responsible and thrive in their financial growth.

“You can make money two ways – make more, or spend less.”

– John Hope Bryant

Let’s go through different stages of teaching financial literacy to our children. You can introduce each learning item at certain time based on your child’s age and maturity, and guide them to a better position by the time they start earning. It helps them to start building their finances early in the age. This is what one of the great investor Warren Buffet once quoted "I made my first investment at age eleven. I was wasting my life up until then.", so early the journey starts the more success you going to taste.


We usually start giving allowance to kids when they are about 3 or 4 years old, if you are not, please start doing it now. It is good age to start introducing them to money, explaining what it is, how it works, how we get toys, clothes, and everything. They might not completely understand the value, and the way money works. But it is ok to start simple, so they get to know about money and start learning by playing with it, saving it in their piggy bank. And as they grow, the allowance also grows and it makes more sense to them on how money works and will have better understanding.

Kids saving
Every kid start with coins and mostly it will be like a toy to them, counting, arranging. Photo by cottonbro from Pexels.
Kids saving
They grow up and understand value of money, how to spend? on what?. Photo by Karolina Grabowska from Pexels

Never give allowance for doing something, or based on their grades or only if they help you in chores. Allowance shouldn’t be tied to anything, it should be a weekly or monthly payment you give to your children to spend on the things they like. If you want them to learn doing chores, or give you helping hand, you can offer to reward them for doing that. It will be like a bonus to them and also boosts them to do it.


Kids saving
Photo by Kristina Paukshtite from Pexels

As children grow and understand the value of money, we need to teach them about savings. Make them understand not to spend everything at once, save it for future expenses. Take an example, ask your child what they wish to have in near future, like a toy, or a video game that they want or collectible that they want to buy, which may cost more than their allowance. Then explain how savings will help them to accumulate the money over time to buy or get what they desire.

“Do not save what is left after spending, but spend what is left after saving.

– Warren Buffet

By taking examples related to them, they get connected easily and understand more clearly, quickly and also keep them to be interested in learning. They can learn how much percent they need to save, and also can help with chores or other house work for some rewards which adds on top of regular savings. Another quote from Warren Buffet, that we need to spend only after cutting our savings form the earnings. This may be too much for children, but it has to be clearly taught to children and make sure they don’t waste their allowances on unnecessary things.

“Knowing is not enough, we must apply. Willing is not enough, we must do.

– Bruce Lee

Another famous quote which is from Bruce Lee saying that just learning or understading is not enough, we must do and apply in practice. We need to make sure our children are following and creating an habit of what you teach. You can act as Savings Bank and ask them to deposit the money they like to save and maintain a ledger, just to give them the feel of savings account. It will be fun, interactive and a learning experience to children.


“Don’t work for money; make it work for you”

– Robert Kiyosaki

Savings is just part of the earnings which we save for future, it is always directly proportion to our earnings, to increase our savings we need to work more and more and more. Investing is the next and very important thing that has to be taught to children, so they don’t have to work too hard. They need to understand and learn how investing helps to increase their savings. As Robert Kiyosaki has quoted, we need to teach our children how to compound the money and make it work for them.

Power of Compounding

Power of Compounding

We need to explain the power of compounding. You can explain this using famous metaphor used to explain investment “Doubling a penny everyday”, if you double a penny everyday for a month (31 days) you will have $0.16 by 5 days, $5.12 by 10 days, around $5K by 20 days, around $5.3M by 30 days and around $10.7M by 31 days. If you see how a penny compounds to millions as time passes, and also notice that each day makes too much difference. Timing is also an important factor in investment, the longer we invest the more income we yield. We need to teach our children to invest as early as they start earning so they can yield more money as they grow. Literally your investment doesn’t double every day, but this is just to show how in long term you can yield more money.

Doubling penny everyday

Few principles to teach your children,

  • Keep savings and investments separate, don’t forget to save something other than your investments.
  • Never invest more than you can afford to loose.
  • Start investing as early as you can, because the longer you invest the more money you can yield.
  • Don’t watch the market closely, target for long term investment.

Money is not the only investment, you need to teach them different kinds of investments real estate, collectibles, crypto, bonds and, a great idea is also an investment. Encourage them to come up with ideas in the areas they are passionate about. Explain about investments in startups, products, apps, and so on. Who knows they can come up with revolutionary idea?

Stock Profit
Photo by Nataliya Vaitkevich from Pexels
Stock Loss
Photo by Nataliya Vaitkevich from Pexels

Profits and losses are most common in investments and we should not get carried away by it and take any emotional decisions like getting greedy when you see profits and investing more than you can afford or getting depressed when you see losses and sell everything. Same applies to ideas if something fails they should not feel discouraged and stop exploring. Controlling our emotions and taking wise decision on any situation is a key to earn more money in long term. And that has to be taught to our children.

Risk comes from not knowing what you’re doing.

– Warren Buffet
Manage Money
Photo by Anete Lusina from Pexels

It seems so much for children to take and learn, what is the better approach to teach them that doesn’t bore or make them loose interest. If you remember you acted as Savings Bank and helped them to understand savings, now you need to be an investment advisor and help them to setup their portfolio. You can create your own stock exchange and help them to invest, you can use brands of their toys, gadgets or any interesting company names, create stocks for those and make them to invest in that. Have a weekly/monthly review and show them how prices increase or decrease based on different criteria and influences. The details you want to dive into can vary based on age and maturity of the child, there are plenty of things to explain to them. And it is not just few months teaching, you need to make this as an habit until they start earning or have mastered basics in investments. It will be an ongoing learning experience.

“An investment in knowledge pays the best interest.”

– Benjamin Franklin

We can just teach basics, investments itself is an ocean and there are plenty of things to learn and explore. But if your children get expertise in these basics by the time they start earning, they can make a fortune when they jump in to investments. Let’s help them to gain that expertise and build that interest to thrive financially as they grow. I just want to reiterate the quote from Bruce Lee, "Knowing is not enough, we must apply. Willing is not enough, we must do.", so make sure your children are implementing and building an habit from what you taught them.


Someone’s sitting in the shade today because someone planted a tree a long time ago.

– Warren Buffet
Donations, sharing

Last but not the least, we need to teach our children habit of giving or sharing, as they get best in managing their finances we need to teach them to share, donate and help others when possible. And this has to be a habit that they practice for the betterment of self and others.

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