“Can I Have That?”—Teaching Kids to Make Smart Money Choices
If you’re a parent like me, there’s probably been a moment at the store when your child pointed to something with sparkling eyes and said, “Can I have that?” It could’ve been a brightly colored toy, a flashy gadget, or even candy strategically placed at checkout (you know the one). While it’s tempting to give in, I’ve learned that these moments are golden opportunities to teach my kids something much bigger than “Yes” or “No.” These are the moments when we can lay the foundation for smart money choices that’ll stick with them for life.
But how do you teach kids about money without it feeling like a lecture? Trust me, I’ve stumbled plenty on this path, but along the way, I’ve discovered strategies that work. This guide will walk you through the psychology behind why kids ask for everything under the sun, how we can teach them to make smarter decisions and ways to tailor strategies to their age and understanding.
Inside the Mind of a Mini-Spender: Why Kids Ask for Everything
As I’ve noticed with my own kids, understanding the difference between needs and wants can be a real challenge—for parents and children alike. A study published in the journal Childhood Vulnerability highlights how pivotal this distinction is for how we manage resources and set priorities as a family.
It’s something I think about every time I hear, “Can I have that?” Understanding what drives these requests is key, so before we tackle solutions, here’s a quick look at the psychology behind it all.
1. Why Kids Are Drawn to Instant Gratification
From a developmental standpoint, children are wired for the here-and-now. My 6-year-old once declared she had to have a stuffed animal she saw... yet a day later, she forgot it even existed.
That’s because kids (especially younger ones) haven’t fully developed the ability to process delayed gratification. They focus on immediate satisfaction, which makes saying “no” even harder for parents.
2. The Influence of Marketing and Peer Pressure
Have you noticed how commercials and ads are laser-focused on catching kids’ attention? Bright colors, catchy jingles, and commercials with other kids playing happily? I see this in my home all the time, especially with my 8-year-old glued to YouTube. Marketing isn’t just influencing adults; it’s forming kids’ opinions of what they “need.” Add peer pressure to the mix, and the desire to keep up with friends only grows.
3. Wants vs. Needs
One of the biggest lessons I try to teach my kids is the difference between wants and needs. It’s not something they naturally understand. Younger kids see everything they like as a need, while older kids may struggle to distinguish between essentials and luxuries. It’s a process, but I promise—with time, they start getting it.
Money Talks That Actually Stick
Teaching your kids a framework for making better money decisions isn’t about perfection; it’s about giving them tools they can practice.
The Three-Question Method
One strategy I’ve found helpful is asking my kids three questions when they want something:
- “Do I need this or want this?”: By pausing to define whether it’s a necessity or a desire, my daughter gets better at recognizing when she’s just swept up in the moment.
- "Do I have enough money saved for this?": For slightly older kids (like my 10-year-old), this was such a valuable lesson. It gets them thinking about their money and priorities.
- "Will I still want this in a week?": This one was a game changer in our house. It teaches patience and prevents impulse purchases that’ll collect dust shortly after arriving home.
The Wait-and-Evaluate Strategy
I’ll admit, waiting isn’t easy, even for adults. But it’s so rewarding when kids begin to realize the value of pausing before making a choice. Here’s how to build this habit with them:
- Cooling-off periods: We have a 3-day rule for anything my kids want that’s over $20. If they still want it after 3 days, we will revisit the idea. (Spoiler alert: Most things lose their shine by day 2!)
- Wish lists instead of buying: At home, we created a “Wish List” journal. If my daughter sees something she loves, I tell her to jot it down. She loves flipping through her list, and it helps her see which desires stick over time.
- Reviewing past purchases: A few times a year, I sit down with my tweens to talk about what they’ve spent their allowance on. Did they love it? Regret it? It’s not about calling out mistakes; it’s about learning.
From Piggy Banks to Paychecks: Tailoring Lessons to Every Age
Not all kids learn lessons in the same way, and what works for a preschooler might flop with a teenager. Here’s how to tailor strategies to their stage in life:
Preschoolers (Ages 3-5)
- Simple either/or choices: Instead of saying “no” outright, give toddlers a choice. For instance, “Would you like the ball or bubbles?”
- Sorting games for needs vs. wants: We turned this into a fun activity using toy flashcards.
- Role-playing with play money: My 5-year-old loves “shopping” using fake bills. It’s early exposure to spending decisions.
Elementary Age (Ages 6-10)
- Compare prices: This is a great time to teach the value of $1 and how some items are worth the splurge while others aren’t!
- Allowance basics: We use this age range to introduce spending boundaries through small allowances.
- Save-up strategies: My son wanted a Lego set that cost $50. It took him six weeks to save, and boy, was he proud when he finally got it!
Tweens and Teens (Ages 11-18)
This is where we go big on autonomy while weaving in life lessons.
- Advanced budgeting: We use apps to track savings for specific goals like gifts or electronics.
- Spotting marketing tactics: Ads are now subtler than ever, targeting teens through influencers and social media. Awareness is key.
- Long-term goals: High school is an excellent time to show how small spending choices add up to big results down the line.
Turning “Buy Me That!” Moments Into Learning Wins
Money lessons stick best when learned hands-on. Here’s how to turn everyday scenarios into valuable teaching moments.
At the Grocery Store
- Unit price comparison: My kids pretend they’re detectives searching for the cheapest price.
- Spending limits: We give them their own snack budget to manage.
During Shopping Trips
- Set clear expectations upfront: Heading to the mall? Lay out what’s okay to buy beforehand.
- The envelope method: When my older daughter goes shopping, I give her an allowance in cash so she can’t overspend.
Online and Digital Purchases
This one is trickier, but so important.
- Virtual spending awareness: My 12-year-old didn’t realize how in-app purchases worked until we sat down and reviewed them together.
- The risks of “free”: Games and apps often come with hidden costs. Educating kids on this is priceless.
Building Decision-Making Skills Over Time
Smart spending is a long game. Kids need consistent interactions to shape their financial mindset.
Teaching Critical Thinking
From spotting cleverly worded ads to questioning product quality, critical thinking is a skill I model with my kids daily. Buyer’s remorse? We don’t sweep it under the rug—we openly talk about what didn’t work and why.
Creating Learning Opportunities
My family recently tackled a big decision together when buying a new refrigerator. We talked value, brand reviews, and sales! It turned into an eye-opener for the kids, who loved “helping.”
Real-Life Money Meltdowns (and What to Do)
When theory meets real life, things aren’t always smooth. Here are some common hiccups and how to address them:
- Meltdowns at the store: I offer firm kindness and stick to our rules.
- Social comparisons: I encourage conversations about how everyone’s family handles money differently. There’s no one “right” way.
Tools and Techniques for Success
Teaching kids about money can feel overwhelming, but with the right tools, it’s easier than it seems! Below, I’m sharing some of my favorite practical tips and tricks that make learning about finances both fun and approachable for kids.
1. Visual Aids That Work
Hands-on tools like “spend vs. save” jars and chore charts are perfect for younger kids. They make money lessons simple and visual, helping kids connect actions to earnings.
2. Leveraging Kid-Friendly Apps
Apps like Greenlight and RoosterMoney are excellent for tracking allowances, setting savings goals, and even learning about charitable giving. They make budgeting less intimidating and more interactive.
3. Family Budget Talks
Turn everyday moments into teaching opportunities. Whether it’s a pizza night discussion about family vacations or brainstorming ways to save for a big purchase, these conversations create a safe space to talk about money openly.
4. Rewarding Smart Choices
Celebrate financial milestones, even the small ones. Whether it’s a congratulatory “You did it!” or covering a small cost like tax on a big purchase, these gestures reinforce positive money habits.
Future-Proofing Your Kid’s Wallet
Helping kids plan and think about money for the future doesn’t have to be complicated. It’s all about tying everyday decisions to bigger goals and staying patient and consistent. Here’s how I approach it:
1. Linking Goals to Money Decisions
Tie real-life goals to financial lessons. Teaching about saving, budgeting, or loans becomes meaningful when kids plan for something they genuinely want, like a car or a special trip.
2. Encouraging Delayed Gratification
Help kids practice patience by waiting for big purchases. Show them how their efforts and savings grow over time, reinforcing the value of working toward something meaningful.
3. Keeping the Dialogue Open
Regular conversations about money make it less overwhelming and more approachable. Use casual check-ins to reflect on smart purchases, review financial goals, or address challenges together.
Teaching kids about finances step by step builds not just their money skills but also their confidence in decision-making. These tools and ongoing conversations pave the way for lifelong financial independence.
"Money lessons don’t have to be boring! Turn saving and budgeting into a game by linking cash to cool goals, teaching patience, and chatting about money like it’s part of everyday fun."
Savvy Picks!
Before you go, here are 5 easy ways to start building smarter money habits with your kids today:
- Create a family “wish list” notebook to turn impulse desires into thoughtful goals.
- Give kids small allowances and encourage them to save for something they love.
- Use grocery trips as real-world lessons for comparison shopping and budgeting.
- Teach “cooling-off rules” to reduce impulse purchases and build patience.
- Have regular chats around family finances to model smart decision-making.
Parenting for Financial Success: You’re Nailing It!
Teaching kids about money is more than just handing out allowances; it’s about helping them shape a relationship with money that lasts a lifetime. By taking the time to model good habits, share real-world examples, and involve them in decisions, you’re giving them the tools to make confident, thoughtful choices in the future. Parenting wins don’t get much bigger than that.
