ESSAY
What Are We Teaching Our Children About Money?
Children learn about money long before we sit them down to explain saving, investing or compound interest. Most of their first lessons come from watching us.
I have been thinking more about this recently because of my son.
When you have a child, you start noticing things that you probably would have ignored before. You notice the questions they ask, the things they copy, the little comments that come back to you days later. Sometimes they are not really asking about money at all, although money is sitting underneath the question.
Why do we buy this?
Why don't we buy that?
Why does somebody have a bigger house?
Why does Dad work so much?
Why can't we just get it?
Those questions are much more interesting to me than teaching a child what an ETF is.
We can explain investing later. We can teach them how interest works, what a stock is, why diversification matters and why spending everything you earn makes it difficult to build wealth.
The harder lesson comes much earlier.
What does money mean in this family?
Children are watching before they are listening
When we talk about financial education for children, we usually imagine a conversation. We sit them down, give them some pocket money, perhaps buy them a savings box and explain that they should save some of what they receive.
That conversation can be useful, although it is not where financial education begins.
It begins in the supermarket.
It begins when a child asks for something and watches the reaction.
It begins when they see us choose between two products, complain about a price, buy something without thinking or put something back on the shelf.
It begins when they hear us talk about our salary.
It begins when they see us come home from work exhausted and then hear ourselves say that we need to work harder so we can afford more.
It begins when they notice that every time we earn a little more, the things around us somehow become a little more expensive as well.
Children may not understand lifestyle inflation, opportunity cost or financial independence, but they are very good at recognizing patterns.
They are watching what we do long before they understand the words we use to explain why we do it.
“We can't afford it” is not always the lesson I want to teach
One of the phrases parents use naturally is, “We can't afford that.” I have used it myself.
Sometimes it is completely true, and there is nothing wrong with saying it. There are things we genuinely cannot afford, particularly when money is tight.
There is another situation, though, where I think a slightly different sentence can teach something much more useful.
“We could buy it, but we'd rather use the money for something else.”
That is a very different idea.
The first sentence can teach a child that money is a barrier. The second can teach them that money is a choice.
A child does not need to understand the term opportunity cost to understand that buying one thing means not using that money somewhere else.
Every euro can only have one job at a time.
If I spend €50 on something today, that €50 cannot also become part of a holiday next summer, an investment for the future or something that gives the family another option later.
The point is not to make children feel guilty about spending.
The point is to show them that spending is a decision, not simply a reaction to wanting something.
Wanting something and valuing it are not the same thing
I think this is one of the most useful lessons a child can learn, and it is also one that adults regularly struggle with.
We see something.
We want it.
We buy it.
Then the excitement fades and the object becomes part of the background of our lives.
Children are going to experience this regardless of how carefully we explain money to them. I would rather let them experience it with €20 than with €2,000.
If a child spends €20 on something they really want and three days later decides they do not care about it anymore, I don't necessarily think the parent should rush in and say, “I told you so.”
The €20 may have been a very cheap lesson.
They have discovered something that a lecture cannot quite reproduce: wanting something at one moment does not guarantee that you will value it later.
That is a financial lesson, although it is also a lesson about being human.
We spend a lot of our adult lives trying to learn the same thing.
I don't want to teach my son that every mistake must be prevented
There is a temptation when you are a parent to protect your children from mistakes.
You know what is going to happen because you have already made the mistake yourself, so you try to stop them before they get there.
Sometimes that is exactly what a parent should do.
Money is one area where I think small mistakes can be useful.
A child who spends all of their pocket money on something disappointing has not ruined their financial future. They have paid €10 or €20 for an experience that might make the next decision different.
That is very different from allowing a child to make a serious financial mistake that they cannot recover from.
The goal is not to let them fail everywhere.
The goal is to give them a safe enough space in which they can discover that choices have consequences.
Saving is important, although understanding why you sometimes choose not to spend is even more important.
Then there is the word I think we rarely teach: enough
This one is harder because adults are still trying to learn it themselves.
We earn more and the bigger income feels wonderful for a while.
Then it becomes normal.
The apartment that once seemed luxurious becomes the apartment we think we need. The car that once felt expensive becomes the car we consider ordinary. The holiday that once felt special becomes the holiday we compare the next holiday against.
Our definition of normal moves.
Children see that movement even when we never explain it to them.
I would rather teach my son that earning more can create more choices without creating an obligation to spend more.
There is a subtle difference between saying, “Now we can afford more,” and saying, “Now we have more options.”
The second idea is closer to how I think about money today.
Money can buy things, obviously. More importantly, used well, it can buy flexibility, time and the ability to make decisions without every decision being dictated by the next paycheck.
That is what I want him to understand.
The lifestyle lesson may be stronger than the money lesson
Imagine explaining to a child that saving is important while they watch every salary increase immediately turn into a bigger house, a newer car, more expensive holidays and another subscription.
The words say one thing.
The life says something else.
Children are probably going to believe the life.
That does not mean parents have to live an austere life or hide every purchase. I don't think children need to grow up believing that spending money is somehow bad.
They need to see that spending has a reason.
They need to see that adults sometimes choose the expensive option because it genuinely matters to them, and sometimes choose the cheaper option because the difference simply is not worth the money.
They need to see that a higher salary does not automatically require a higher lifestyle.
They need to see that work has a cost as well as a salary.
If we tell children that money buys freedom while they watch us spend every waking hour earning more of it, they are going to notice the contradiction.
What should we actually teach them?
I don't think there is a perfect financial curriculum for children.
I would start much more simply.
Teach them that money comes from somewhere.
Teach them that every euro has choices attached to it.
Teach them that saving is not about being afraid to spend, but about keeping some of today's money available for tomorrow's choices.
Teach them that investing is different from saving because the money is being put to work rather than simply being stored.
Teach them that things can become normal very quickly, even things that once felt special.
Teach them that making more money does not create an obligation to spend more money.
Teach them that a mistake with a small amount of money can be a useful teacher.
Teach them that generosity matters too, because money is not only about what we keep for ourselves.
Most of all, teach them to ask what the money is for.
That question is bigger than saving.
It is bigger than investing.
It is even bigger than financial independence.
The conversation I want to have one day
I don't know exactly what I will say when my son is old enough to understand all of this.
I know what I don't want to do.
I don't want to sit down one evening and give him a two-hour lecture about compound interest, ETFs and retirement planning, then congratulate myself because I have successfully taught him about money.
I want the explanation to make sense because he has already seen pieces of it in our everyday life.
When we choose not to buy something, he should understand that it does not automatically mean we cannot afford it.
When we buy something expensive, he should understand that it mattered enough to us to use the money for it.
When we save, I want him to understand that we are not simply saying no to today. We are keeping a choice open for tomorrow.
When we invest, I want him to understand that money can become an employee of sorts, working quietly in the background rather than requiring us to spend our time earning every euro ourselves.
When he makes a bad purchase with his own money, I want him to have enough room to learn from it.
When he eventually earns more than he needs, I hope he remembers that more income does not have to mean more consumption.
That would be a pretty good financial education.
Perhaps the first lesson is what they see us doing
When I think about my own relationship with money, I can see how much of it came from observation.
Some things were said to me directly. Other things were never said at all, although I absorbed them anyway.
I learned ideas about work, success, security and what a good life was supposed to look like without anybody formally teaching those subjects.
That is why I have become less interested in the idea that financial education begins with a savings jar.
The savings jar is useful.
The investment account is useful.
The pocket money is useful.
The spreadsheet is useful.
None of them is as powerful as watching the adults you trust make decisions with money.
Children notice what we buy.
They notice what we worry about.
They notice whether money seems to give us freedom or whether it seems to create another problem every time we earn more.
They notice whether we talk about people differently because of what they own.
They notice whether we are always chasing the next thing.
They notice whether we have time.
Perhaps that last one is the most important.
If I want my son to understand that money can eventually buy back time, I need him to see that I believe it myself.
Money is not the destination.
It is a tool.
What matters is what we use that tool to build.
The question they may answer before we ever ask it
By the time we finally sit down with our children and explain saving and investing, they may already have formed an answer to a much more important question.
What is money for?
They may have learned their answer from us without us realizing we were teaching them.
Perhaps that is the uncomfortable part of being a parent.
You are always teaching something.
Sometimes it is the lesson you intended to teach.
Sometimes it is the lesson your life teaches while you are busy explaining something else.
I cannot control every lesson my son will take from me. I can control the example I try to give him.
I want him to know that money can buy things, although it can also buy choices. I want him to understand that wanting something is not the same as valuing it, that more is not always better and that enough is a real number even when nobody else seems to know where it is.
Most of all, I want him to have something I did not have when I was younger: the chance to think about what money is actually for before spending twenty years figuring it out the hard way.
From the Journal to the practical side
This is the kind of question I explore here on Mike Petry Journal. On NobodyToldMike.com, I take the same ideas and turn them into practical financial tools and explanations.
If you are working out what financial freedom could look like for your own family, the NobodyToldMike FIRE Calculator can help you put a number around the question. The NobodyToldMike Portfolio Tracker is there to help you see what you are actually building over time.
The NobodyToldMike YouTube channel is where I continue these conversations through stories, examples and practical explanations.
The Journal is where I think about what money means.
NobodyToldMike is where I help turn those ideas into something practical.
For me, though, the most important financial lesson may start much earlier than any calculator or portfolio.
It starts with the life a child sees in front of them.
They are watching.
Educational only. Not financial advice.