How Kids Teach Us About Personal Finance

Today’s post comes from the remarkable Allan Liwanag.

Allan Liwanag is a personal finance blogger who paid off at least $40K debt and saved $70K in 2.5 years. An analyst by day and dedicated blogger by night, he loves to share his thoughts – based on his research and experience – on topics related to family, life, and money. He owns The Practical Saver.

Here’s Allan’s excellent guest post:

Regardless of what we do and who we are in this world, we wear different hats at a given time. Some of us wear the hats of being a boss, a magician, a golfer, nurse, or others. Many of us are parents to our children.

As parents, we strive to make life better for our kids. We teach them important life lessons that will help shape their own values, personalities, and ways of life. We teach them the right and wrong things on just about anything based on our own beliefs.

When I was a single man, a lot of my friends who are parents told me that having kids was more than just an opportunity to raise good children. According to them, it was also an opportunity to learn from kids. Being the inexperienced person I was back then, I would easily dismiss such information just because I had no basis for comparison. I did not have kids of my own to validate what they were speaking about.

A couple of years forward, I know what they meant during that time. Maybe it’s just hard to understand such things when you have not experienced being in this situation (i.e. having kids to raise).

As I go through life together with my wife and my daughter, I have to say that I really learn a lot from my daughter. These learnings even extend to the financial choices I make for our family.

Go with the basics

Kids teach us to be happy and contented even with the basics.

When my daughter started having interest in toys, we gave her building block toys that we bought for less than $5 over at Walmart or Ebay. Up to now, she still likes playing those toys. A lot of our friends and family have given a ton of toys to her, some are used and some are new.

My daughter only played these fancy toys for a couple of times. After that, she went back to her small, mechanical block toys. Even when her play space is filled with these really cool toys, she would still find her building blocks and play them like the rest of the toys don’t exist.

Regardless of how many toys she has and how better these toys are compared to her simple building blocks, she would still play them like she hasn’t play them before.

So, how does she and her actions teach me and my wife about our finances? The answer is simple and straightforward. My daughter shows us that even when there are better and more appealing products out in the market, we can or should always come back to the basic products because they simply provide us what we need. We realized that if our baby can do that, so can we.

Go try again

Every now and then, I see my daughter gets frustrated when she can’t accomplish what she wants to do.

She’d be upset when she can’t say what she wants to say because her language skills are not fully developed yet. She’d be frustrated when one of her toy eggs won’t open. These are just some of things we notice from her.

In times like these, we would help her and explain her what she needs to do to make things work. We would tell her to be patient and try again until she gets it. She listens to us and makes improvement in no time.

I know there are other kids and parents who have gone or going through these events.

What’s the lesson here? When we are going through tough times like dealing with debt, it seems that life isn’t going to get better. Actually, it could and it will. You just need to put an extra effort to make things better. If you need help, ask for one.

Just like what seventeenth-century English author John Donne said, that is, “no man is an island”. Sometimes, we can’t do things alone. Family and friends are always there when you need them.

Go be creative

Kids are known to be creative and imaginative. Sometimes, kids have imaginary friends and they play with them and have fun. They can make something out of nothing and use their stuff for other purposes.

For example, my daughter uses her towel as dress, superman’s cape, or as a magic carpet. My wife didn’t even tell her what a magic carpet is or has not shown her the movie Aladdin.

As parents who have more responsibilities than our children, we sometimes forget to be creative and imaginative because of so many things going on at the same time. We focused too much on what’s in front of us that we forget to think outside the box. I can say the same thing with our finances.

Kids teach us to be resourceful. When we as parents try to make the ends meet, we need to stretch the money we have. We need to understand and learn what we can cut down or cut out from our expenses. We may need to think what we have now, be creative, and find other purposes so we can save money by not spending on other products. We certainly can use some DIY talents that are still dormant inside our subconscious mind.

There are always ways to make our finances better and more manageable only if we put our creativity, resourcefulness, and imagination at work.

Go learn some more

Kids constantly learn new things. From the time they are born, kids learn at a faster rate than we adults can.

Kids learn how to play with other kids. They learn how to read, learn new talents and skills, among others. They are sponges when it comes to learning. They will absorb and retain the lessons they learn and these will stay with them for a long time.

As parents or adults, we consistently learn as well and we learn every day. Just because we are adults doesn’t mean that we stop learning. Learning about finances should not be an exception.

The more we educate ourselves about investments, savings, spending, among others, the better decisions we make in our personal finance. For the most part, the only thing that separate us from learning more about personal finance is our lack of willingness to learn and make time for it.

Go sacrifice

I don’t know of any parents who have not sacrificed their needs so their kids can get theirs.

When I was a young man, one who didn’t have responsibility and family, I always thought the kids of my siblings were spoiled because they got what they needed but my siblings (i.e. their parents) had to give way for their kids. But it was all sacrifice out of love and care.

As parents we learn to sacrifice so our kids can have a better life now and in the future. We sacrifice because we like them to have more than what we have even if it means that we work harder and guard them round the clock.

If we know how to sacrifice for our kids, which is true definition of sacrifice, we can set aside our wants in exchange for our needs. We grow older by the day and many of us will want to retire in the future. Would it be too much to sacrifice what we want and save money so we can have a good life when we retire? Is it too much to ask to save money for emergency so when rainy days come, we have money to meet those emergencies?

Go do what I say and do 

I have seen many parents who want to teach their kids to focus on having what they need and not what they want. I say that this is really a good lesson for kids. They teach their kids why needs are far more important over wants. Many children will follow their parents because they understand that their parents are teaching what is best for them.

Ironically, many of these parents would go on to buy what they want for themselves, something that’s opposite to what they teach.

Kids teach us the lessons of listening and acting appropriately based on what is taught. Parents can learn from these lessons. If we want our kids to follow what we teach them, we should always set ourselves as examples for them. If we teach our kids to prioritize needs over wants, it is in our best interest and your kids’ to do what we say and not just for them to do what we want them to do.


As parents, we are responsible for teaching our kids. Just because kids are kids doesn’t mean that we cannot learn from them. Though they are far younger than we are, we can learn valuable lessons that we can directly apply to our life especially to our finances.

What have you learned from your children? Do you think that children provide us lessons that we can use for financial decisions that we may make for ourselves?

9 comments… add one
  • The Green Swan Apr 28, 2016, 6:45 am

    My wife and I have a two year old boy and he has been great. One of the things we’ve benefitted or learned from having him is to slow down and enjoy the little things. He loves getting outside, either riding his bike, playing in the sand box, or going to the park. This, of course, helps get us outside…going for rides, walks, sitting in the park watching him play, etc. Simple activities like this have been very enjoyable, yet cheap or at no cost. We haven’t had a true vacation in over three years, but we’ve been enjoying him and the simple things.

    Although I will say, once he gets older, we will look forward to showing him more of the country and traveling. Thanks for the post.

    The Green Swan

    • I totally agree with you. Adults like us tend to move so fast (not literally speaking) that we forget to slow down and enjoy even the smallest things we see. Our kids remind us that it’s never bad to slow down and have fun once in a while.

      From time to time, I like being with my daughter even when we are not doing anything at all. Sometimes, we just sit down on the couch and do absolutely nothing and it’s fun to me.

  • amber tree Apr 28, 2016, 1:03 pm

    We have 2 girls, almost 4 and 6. We do i deed teach them a lot. And it is true, we also learn from them. You learn again to be creative. That is the most interesting part to me. Like you say, a town becomes whatever they imagine. Or we jump through the city, pretending we avoid crocodiles. Our minds as adults often get too serious and focused on reality…

    • Kids have a great imagination. They can make up something out of nothing. It just amazes me how they are able to do that without exerting any effort. We can learn and re-learn the art of creativity from our kids. They serve as examples that creativity can and will make a difference.

  • The Personal Economist Apr 28, 2016, 3:51 pm

    Lovely post, it all resonated with me. have 2 kids 6 and 7. They’ve taught me family is the most important thing and it has completely changed my view on life and goals and financial strategy. And they have taught me to live in the present and enjoy today. I haven’t mastered this yet but I’m trying,

    • As part of the family, we mostly tend to define and execute our goals based on how we think these goals will affect our family. When I decide on something, I always consider my family and not just myself. When I do it like this, it’s much easier for me to think of a goal because I have inspiration that I can use.

      Yes, family is the most important thing and it is for me. Family certainly teaches you to live in the present but at the same time mind about the future.

  • Mr. PIE Apr 28, 2016, 8:47 pm

    Great post. Loved it.
    There is also much we can teach our money about children.
    Courage to stay the course…..through up and down markets
    Try new things…..diversity, asset allocation….
    Be active….a portfolio should never be stagnant….even a little change and activity can freshen things up
    Be a hero….yeah, let’s not settle for the mediocre savings rate. Let’s push ourselves to the max!!

  • Financial Slacker Apr 28, 2016, 10:17 pm

    One of the things that I found fascinating about my children was their ability to hear things even when you think they weren’t listening. Sometimes, many months later, they would repeat something you had said.

    This “sponge” ability is amazing. They are so open to learning new things. If we adults could set aside our preconceived ideas about how things should be and instead, see things through the eyes of a child, we could expand our creativity exponentially.

  • FinanceSuperhero May 2, 2016, 3:35 pm

    Allan, you’ve captured a little-known dynamic with this article. Children are far wiser than we credit them. Having worked in various school settings, I have taught literally thousands of children. People are always surprised to hear me say that the children have taught more than I’ve taught them.

    The biggest lesson I have learned from children is the importance of being kind to everyone. While we cannot completely control our circumstances, finances, or other people, we can control the kindness we demonstrate to other people. We aren’t born with the inclination toward selfishness and conceit; those traits are learned over time. I am constantly refreshed by the caring and kindness of children.

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