Thrive in 2025: Raise a Money-Smart Kid

The Lesson: You work to earn money.

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No doubt you can still hear your own parents' anguished refrain, "Do you think money grows on trees?" But as Richard Bromfield, Ph.D., a child psychologist and author of How to Unspoil Your Child Fast, says, "Actually, kids today think it comes out of ATMs." Take the time to explain that these machines are like a piggy bank. They hold your money, and when you take some of it out, you have less for next time. How do you get more? By earning it.

Pay them cash for helping you out.

Although you shouldn't reward your child for performing ordinary chores, compensating him for taking on extra projects (such as cleaning out the garage) will help him connect the dots between working and getting paid. Jennifer McIntyre, of Philadelphia, gives her 6-year-old daughter, Lily, a few dollars when she makes the beds or folds the laundry, tasks that go beyond her usual clean-up assignments. "The beds may look a bit wrinkled, but it gives her a proactive way to earn that's connected to her labor," says McIntyre.

Show them where you work.

Your kids may hear about a place called "Mommy's job" all the time, but it remains an abstract concept until they see where you go and what you do every day. This exposure will help your children grasp the relationship between working and making money. "And eventually they'll realize that by spending time at your job, you make money to pay for things your family needs," says Nathan Dungan, a family-finance expert and author of Prodigal Sons & Material Girls.

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