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It’s Never Too Early for Financial Literacy Education

It’s Never Too Early for Financial Literacy Education

posted by Karen Quinn, The Testing Mom - May 17th, 2022

By Adam Cook


Now more than ever, the volatile economic climate that we live in warrants a comprehensive financial education regimen. Without a working knowledge of financial literacy, individuals often find themselves in situations that are completely overwhelming and, unfortunately, wholly avoidable. Economist and former chair of the Federal Reserve, Alan Greenspan, hit the nail on the head when he remarked, “The number one problem in today’s generation and economy is the lack of financial literacy.” And, as the old adage goes, when we fail to prepare, we prepare to fail. We owe it to our children and our children’s children to start a culture of confidence in financial literacy. We owe it to our children to start now. 

So, what is financial literacy and where should I start with my child?

Simply put, financial literacy is the collection of knowledge necessary to make sound financial decisions. A financially literate person understands how to both manage their money and appropriately allocate the income they receive. The interesting challenge with financial literacy, however, is that the very concept is in a state of constant transformation. While some tried-and-true financial truths certainly still apply, the bar for fiscal responsibility and awareness has been significantly raised with each generation. Those of you who grew up in the 70’s and 80’s can certainly attest that the advice you received from parents and teachers as a child, while well-intentioned and possibly still accurate, does not even begin to cover the economic landscape we face today and our children will face in 10 or 20 years. 


Understanding Value

I was at the grocery store a few weeks ago and saw a very familiar scene play out. A visibly tired mom is rushing around with her shopping cart while trying to tackle the week’s grocery list and wrangle her small children at the same time. One of those small children spots a box of cereal on the shelf that they want, immediately grabs it, and holds it up to their mom like Rafiki holding up Simba in The Lion King. At that moment, I see the turmoil in the mom’s face. She’s debating the issue we’ve all faced in that same grocery store aisle- Do I stand my ground because we are on a budget and already have cereal at home, or do I give in and avoid a meltdown? 

While there are many complexities to parenting that go into that moment, the financial aspect of this scene that most children do not understand just yet is the time and effort that preceded the $3.98 you would have used to buy the box of Fruit Loops. It’s not just the money or your budget, it’s the principle. You work hard for your money, and you wish your children would recognize that by being grateful for the things you have provided them. When we start conversations about where money comes from early on, our children gain a better sense of what it truly takes to earn an income. I recommend even making these conversations fun. Turn them into learning experiences by including your children in making the family budget, considering purchases, and saving money. In doing so, your children will begin to also develop a better understanding of concrete monetary values and comparative ratios that will be both academically and developmentally beneficial. Soon, those conversations will turn into your children reconsidering that meltdown over the Fruit Loops. 


Developing Appreciation

In addition to understanding the value of money, most of us also want them to develop a sense of frugality. Sometimes the word “frugal” carries a negative connotation, but I think the concept has just gotten a bad rap from all of us 90’s kids who heard our parents constantly proclaim “You know, money doesn’t grow on trees” when we asked for a new Walkman. Parents want their children to appreciate money because, in a vast majority of situations, it is so hard to come by. By learning to treat money as an asset rather than an assurance, our children learn to behave and treat commodities with the respect necessary to preserve value. This can only occur, however, when parents make an earnest effort to communicate the real value of money’s past, present, and future value. When our children are instructed in the relationship between time and earning potential, they can begin to more easily associate money and belongings with their relative value to themselves and the ones who purchased them- the parents. 


Risk Awareness

As parents, we know that there is an inherent risk in life, and finances are no different. We also know from experience that lack of education on an issue can be a costly risk. I will never forget when I first moved to Dallas and began driving to my new job. Having grown up in a small, red-dirt town in East Texas with two main roads and a Dairy Queen, I thought the tollway was the greatest transportation innovation ever. That is until I received my first toll bill in the mail. Because I had neglected to research the tollway and had no clue what a toll tag was, I lost out on a significant amount of savings. Lack of education can be costly. For this reason, we must teach our children about the major pitfalls of financial decision-making. Will we be able to cover every area of potential risk or anticipate every financial problem our children will make? Absolutely not. But, what we can do is help our children learn from our own mistakes and carve out a path that enables them to make good choices on their own. 

One simple lesson that you can teach your children about risk is weighing their options before making a decision. Impulsivity is a part of almost every child’s nature. Thankfully, some grow out of this, but weighing one’s options is a practice that can be taught, learned, and perfected. The next time your child is faced with a tough decision, sit down with them and help them map out the possible outcomes of their available options by thinking out loud with them. Apply this same concept in your conversations about money and reinforce the idea that, if they truly value and appreciate money, they will make smart decisions with it. 


Promote Future Planning

Most adults know the saying, “hindsight is 20/20.” It rings particularly true when it comes to foolish decisions with money. We want our children to develop the foresight that we didn’t have when we used our allowance to buy Ninja Turtle action figures instead of stashing it away in our piggy banks. However, we also want our children to learn to recognize legitimate opportunities that present themselves. There’s a delicate balance between frugality and comfort, conservative investing and entrepreneurship that we want our children to be able to skillfully navigate. By starting conversations early on about the power of money, not only to purchase, but to grow and to provide opportunities, parents create future-minded children. 

At Testing Mom, we recognize that the age of digital currencies is anything but a passing fad. It is a relatively new and rapidly burgeoning technological space within the finance world, and we are already offering multiple group classes for students that are focused on learning about major cryptocurrencies. We cannot neglect the changing world around us, and we feel strongly that our class offerings should mirror the learning needs of our students. In addition to looking at the world for inspiration, parents can also look inside their own home. Ask yourself and your children what your goals are in terms of saving, purchasing, budget, and investing. Hopefully you’ve already created some simple finance goals and involved your children in that process, but if not, go ahead and come up with a few. For example, you might decide to work as a family to save up for a fun outing this summer or decide to work together to raise money for a local charity. After deciding on a goal, take the opportunity to discuss with your children how their actions and decisions now will impact the ultimate success or delay of that goal. 


Stress Management

In last year’s CreditWise survey from CapitalOne, it was reported that 73% of Americans felt finances were the most significant source of stress. When the survey focused on the younger generations, millennials and Gen Z’ers, it found that roughly 82% of respondents within that age group found finances to be stressful. Of course, most of us know that money issues are one of the leading causes of divorce in North America and have been for some time. We certainly care a great deal about our children’s mental wellbeing, so it simply becomes a matter of recognizing the link between money and stress and attempting to relay that information to our children in a way they can understand. Much like any other complex issue, the more we discuss the way treatment of money can impact stress levels with our children, the less any stigmas or confusion surrounding the issue persist. Simply put, when children have a healthy relationship with money and a confident, working knowledge of how money works, they will have the tools necessary to appropriately plan for and manage stress related to financial issues. 

Of course, one of the most stressful parts of life is the unknown. Unfortunately for some, the unknown presents itself as an unavoidable emergency or disaster that often proves to be very expensive for families. One way that individuals alleviate the stress of these situations is by preparing an emergency fund to use for these very events. There is a great opportunity to involve children in the planning and design of an emergency fund that can go a long way to promote a healthy understanding of how to alleviate money-related stress through preparation. If your emergency fund goal happens to be designed around vehicle expenses, use it as an opportunity to explain to your children how setting aside a small amount each month can make an auto emergency much more manageable later on down the road. 

Ultimately, there is no playbook for how to help your children become financial whizzes. There is only what will work for you and your family and what won’t. However, there is value in considering these simple aspects of financial literacy because your child will be dealing with money for the rest of their life. With a little preparation and patience, you can help create a healthy relationship between your children and money that lasts for years and has a potential impact for generations to come. 

If you are interested in getting a head start in financial literacy for your children but need some help, check our live online group classes and 1-on-1 tutoring sessions!


Certitrek Group, Survey: Certified Divorce Financial Analyst® (CDFA®) Professionals Reveal the Leading Causes of Divorce,,money%20issues%22%20(22%25). Accessed 16 May 2022.


White, Alexandria. “73% Of Americans Rank Their Finances as the No. 1 Stress in Life, According to New Capital One CreditWise Survey.” CNBC, 20 July 2021,,%25)%20and%20family%20(46%25). Accessed 16 May 2022.


Yours in Learning,

Adam Cook Director of Curriculum Design


Adam Cook, M.Ed. is a certified teacher and principal with more than 10 years of experience as a classroom teacher, coach, curriculum designer, and academic coordinator. He is the Director of Curriculum Design for Adam and his wife live in McKinney, Texas where he also works as a high school English teacher and is a doctoral candidate in Education Administration at Texas A&M University-Commerce.

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