How to develop proper behavior with money from childhood

How we behave in life is often directly related to what we learned at a young age. Parents who want to raise their children to be free and independent instill the most important skills of financial literacy from an early age.

Foreign and Lithuanian experts emphasize that it is necessary to explain to children not only how to save, but also how to earn money and invest it.

What is important to teach

The Kiplinger website lists 5 things to teach children about money and happiness.

Explain the value of money.

It’s not enough to say “money doesn’t grow on trees” – explain where money comes from, what it means, how you get it, and what it can buy. Don’t be afraid of misunderstandings and explain to children the basics of supply and demand – why some goods cost more than others.

Live within your budget.

One of the main problems of financial behavior is the inability to live within the means. Overspending sooner or later causes a lot of stress, leads to debt and bankruptcy. Teach children to respect budget restrictions by offering them to buy sweets or toys for a specific amount: 1 EUR, 5 or 10 EUR.

Spending does not equal happiness.

Explain the concept of “short-term happiness” to children. Note that we always have desires, and the joy of getting what we want soon begins to fade. Help them understand that just like eating too much chocolate can lead to health problems, buying too many things (services) can lead to financial trouble.

Teach saving both in the store and in the bank.

Help your child understand the concept of “brand” – that a well-known company’s branded t-shirt is more expensive, even in cases where the quality is the same as that of an unbranded t-shirt. Explain that there is a huge difference between “want” and “need”. Teenagers will be able to understand that knowing that they have enough money for the things they need also gives them great satisfaction.

Talk about giving and demonstrate it.

In order to feel good, it is not necessary to spend money only on yourself. Giving, for example to charities, gives a sense of happiness when money is given to others.


Saving is not the beginning

L. Banytė-Surplienė, the founder of, mentions the following 5 things that should be taught to children when explaining to them about money:

Learn how to make money.

Often explanations to children begin with the fact that you need to know how to save. First you need to explain how to earn money

How to spend wisely.

Explain how advertising works and persuading the audience to buy something.

Why save?

It is more fun for children to save for “future opportunities” than for a “black day”.

How to invest.

In the case of investing, money grows on trees. Time is our ally.

Why should you share or donate?

By giving, we take care of others and feel happier ourselves.

You can find even more financial literacy tips from L. Banytė-Surplienė, as well as economics and entrepreneurship teacher R. Česoniėna and psychologist V. Bartkutė-Vyšniauskienė here.

Want to suggest a topic, have comments, suggestions or questions? Write to the editors of My Money.

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