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Dollars and Sense: Developing Financial Intelligence in Kids

Hey Parents! We all want the best for our children, don't we? One of the greatest gifts you can give your kids is financial intelligence. Picture this: your child, all grown up, making smart financial decisions with confidence. It's not just a dream; it's entirely achievable. In fact, studies like this one from Montana State University show that teaching kids financial intelligence early in life significantly impacts their future financial well-being.


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Mom and daughter

Why Financial Education Matters

Let’s dive right into the why of it. Teaching kids financial intelligence isn't just about teaching them the value of a dollar. It's about setting them up for a secure future. We all want what's best for our children and the next generation as a whole. Giving kids an education in personal finance is a lot like the old saying “give a man a fish and he’ll eat for a day, teach a man to fish and he’ll eat for life.” When we teach personal finance we’re setting up kids to make strong and foundational decisions with their finances that will ensure they have enough wealth to thrive throughout their life.

Financial Literacy vs. Financial Intelligence

The first step is understanding that there’s actual two things that kids (and anyone) need to learn about money: Financial Literacy and Financial Intelligence. Just like most things, only having an academic knowledge of a subject only goes so far when it comes to practical application!

  • Financial literacy is having knowledge about different financial tools and concepts. The academic knowledge of finance, if you will.

  • Financial Intelligence is the practical implementation of that knowledge. It’s about making real-life, informed decisions. So, it's not just about knowing what a budget is; it's about creating and sticking to one.

We need financial literacy to get a baseline understanding of personal finances, but we also need to make sure we’re helping the next generation get ready for the real world by teaching financial intelligence as well!

Practical Tips for Developing Financial Intelligence

Now, let’s get down to the nitty-gritty. How can you, as parents, nurture financial intelligence in your kids?

  1. Be the Role Model

    1. The absolute best way to help your kids develop their financial intelligence is to involve them in real life examples. From the grocery store, to clothes shopping, scrolling on Amazon, and anything else, make sure your kids are learning from your financial habits! And don’t be afraid to tell them when you make a mistake, no one is perfect and trying to teach perfection in finances is impossible to do!

    2. As you’re going through these examples, make sure you’re sharing your thought processes on your decision making. Help your kids understand pro-con lists for purchases, think about the opportunity cost, and understand the consequences of short-term purchases over long-term investing!

  2. Start Early, Start Now

    1. It’s never too early to start teaching your little ones about money. Even preschoolers can grasp basic concepts like needs versus wants. Use everyday situations to explain these ideas. For example, when grocery shopping, involve them in decisions about what to buy within a budget.

  3. Games, Books, and Fun Learning

    1. Learning about money doesn't have to be boring. There are fantastic age-appropriate games, books, and online resources designed to make financial education fun. Games like Monopoly or apps that simulate managing a virtual store can teach budgeting and decision-making skills in an enjoyable way.

Building a Strong Financial Foundation

Imagine your child, years from now, financially independent, making confident decisions about their education, career, and lifestyle, investing habits, the list goes on!. That’s the goal, isn't it?

  1. Empowering Through Education: Financial education empowers kids to make informed decisions about their future. It helps them understand the implications of their choices, whether it’s choosing a college major, taking a student loan, or investing in a business venture. Informed decisions lead to a brighter future.

  2. Parents as Mentors: Parents play a pivotal role in their children’s financial journey. This isn’t a one-time lesson; it’s a lifelong learning process. Be there to guide them as they encounter more complex financial situations. Whether it’s understanding credit scores or investing in stocks, your guidance will be invaluable.


Teaching kids financial intelligence is not just an investment in their future; it’s a gift that keeps on giving. Start early, make it fun, and be their guiding light. By imparting these essential skills, you are preparing them for a future where financial decisions aren’t a source of stress but an opportunity for growth.

Remember, it’s not about how much they know; it’s about how well they can apply that knowledge. Financially intelligent kids become financially responsible adults, and that’s a win for everyone. Start today, and watch your children blossom into financially savvy individuals, ready to conquer the world!

If you’re looking for a place to start on your journey check out our website for great ideas! We have several book series that can get you going on your journey to teach financial literacy, as well as free (and paid) lesson plans and activity ideas to work on financial intelligence!


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