How to teach 7 year-olds good financial habits


“An investment in knowledge always pays the best interest.”

Benjamin Franklin

Money habits are formed by age seven

I didn’t know how to write a check until I was nineteen. I didn’t get my first credit card until I was twenty-three. Some of my family never had had a credit card. We weren’t poor, it just wasn’t the thing at the time.

What I do remember was opening the check book at the bank – in those days you had to go and pick it up – and asking,

‘How does this work? How do I write a check?’

She explained and I very carefully filled in every field and handed it back to her. I felt I’d signed the Declaration of Independence.

These days, kids are better informed. They understand the concepts of finance, customer rights, and legal issues. But these are concepts. In the real world, things are not so clear cut.

Here’s an example.

Recently our son forgot the PIN for his Visa debit card. The easy thing for me to do was phone up, order a new one, and get back to House of Cards. Season 2 isn’t as good, is it?

Instead we agreed on a date to go to the bank together. Remember in Ireland, where we are, banks open at 10 am and close at 5pm. Most, if any, open at weekends.

“Investors should remember that excitement and expenses are their enemies. And if they insist on trying to time their participation in equities, they should try to be fearful when others are greedy and greedy when others are fearful.” ~ Warren Buffett

We organized it during his mid-term break. Tip: mid-terms are an ideal time to do these life-skill activities.

Off we went to the bank. Huge line was before us. Again, the temptation was to turn around, say ‘I’ll do it from home’ and head off to the bookstore instead.

Instead, we waited in line and got to customer service. Now, here’s the thing to note. I encouraged him to explain to the customer service rep that his PIN was missing. In other words, I made an aim to take a back seat and let him do the driving. Of course, the temptation to jump in was there.

We got to the next line for phone banking and waited and waited.

Again I stepped back and allowed him to figure out how phone banking works. He got it faster than I did.

Do I just call?

Yeah, sure. I’m here.

We got through and he explained. In less than a minute it was over. The PIN was ordered.

Now that we had the PIN ordered, and we were at the bank, I thought, why not get him to add money to his account?

So, the same process again. Line, queue, wait, fill form.

What changed was that time he was less nervous. You could see he was relaxed in answering the typical questions you get from bank staff. We added in fifty euro and left for the bookstore. We bought More Than This, Girl Gone and No Country for Old Men.

3 examples of better finance habits for kids

If I told you that children’s attitude to money was defined before they were ten, would you be surprised? I was. And it’s not ten, it’s seven J . The Telegraph (which has an excellent column on finance) shares the following:

Money habits are ‘formed by age seven’

The government-backed Money Advice Service has warned parents “not to underestimate the effect of their own bad money habits”. David Whitebread of Cambridge University, a co-author of the study, said: “The ‘habits of mind’ which influence the ways children approach complex problems and decisions, including financial ones, are largely determined in the first few years of life. Simply imparting information is now recognised as being ineffective in this area.”

Getting Your Kids Started On Money Management

In Singapore, MoneySense reinforce this point by adding, “Teaching children about money management habits is not merely telling them what you want them to do. Children learn through experience. Encouraging them to save through their money boxes or allowing them to handle their own money during “field trips” has a more lasting impact. Hence, always seize real-life opportunities to teach your children the benefits of good money management.”

Anissa highlights the benefit of getting all members in the family pulling together. She explains, “It’s important to do all you can to make sure your whole family is financially sound. If you don’t consider yourself a money management expert, reach out to Consumers Credit Union and the available educational material. Young people must be empowered with the knowledge and the confidence that they can reach their personal economic success.”

Compound interest

David Debman adds that you can “Show your children how to get on the right side of interest. Give them examples of how a small investment can grow substantially over time. You may also want to show them how paying interest to others can be detrimental to you financial health.”


One way to teach your kids the mechanics of finance is to give them real-world opportunities to perform tasks, such as using phone banking. The benefit of doing this is that, like happened to us, you come across obstacles and quirks in the system along the way. For example, the PIN still hasn’t arrived, so we need to look into this.

The other benefit is that they become more confident discussing finance, understand more in class, and can apply this to their lives when they leave the nest.