Money Mindset for Kids: Moving Beyond Earn, Spend and Borrow

money mindset for kids and financial freedom

In the last blog we spoke about who it is that teaches our kids about money. In this post we’d like to delve a little deeper into that topic, because understanding our money mindset is such an important part of changing it.

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Our intention is to build an understanding of why most of us have settled into the role of being a “worker” rather than following a more entrepreneurial path. You will also learn a little more about what we are endeavouring to achieve as a family, and why developing a healthier money mindset for kids matters so much to us.

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Kaitlin learning about money mindset for kids — Kaitlin represents the challenge many teenagers face as they learn about money, work and independence.

Money Mindset for Kids: Moving Beyond Earn, Spend and Borrow

Our kids, like all kids, want to have their own money so that they can have a little independence and buy the things that they want. In our family, our children sometimes receive money when it is their birthday and they also get a little pocket money.

Kaitlin, our eldest, has a part-time job working at a local brewery serving lunches and helping in the kitchen. She works hard and it pays pretty well. However, to take on a job, she loses some of her weekends and time to do school work and have a social life. She also commits time to regular babysitting work for some of the families in the area.

What Is a Money Mindset?

At present, the money mindset of our children is much the same as ours, which is likely to be the same as most other people, and that is to earn money, spend money and borrow money.

Generally, most of us either have a job where we give time for a salary, or we have a business where we still give our time for a monetary return. Whatever the case, we are often tied down and limited by what money we earn, and we sacrifice our time for it. Sound familiar?

The funny thing is that right from an early age we are conditioned to accept this as normal. Often our minds become closed off to entrepreneurial ideas and opportunities. Schools train us and prepare us for the workforce. Parents often do the same by pointing us towards a vocation.

Adding to this, media advertising, TV, politicians, universities and our peers all guide us towards getting a job. It is all around us — well-intentioned people and institutions keeping us on the “straight and narrow” path of getting a job (earn), then spending our money on things (spend), and then borrowing money to spend on even more things (borrow).

The Earn, Spend and Borrow Pattern

Finance companies advertising loans and debt as part of a money mindset — Advertising constantly reinforces an earn, spend and borrow money mindset.

Look at the people around you and you will see this pattern repeated everywhere. People with expensive things like houses, TVs, holidays, cars, boats and caravans. Most are servicing mortgages or loans to pay for it all.

The more things they acquire during their lives, the harder and longer they often have to work to pay for those things. Most people can see no obvious way out of their situation and simply accept that this is what is supposed to happen.

That is one reason why understanding money mindset for kids is so important. If children grow up believing that the only option is to work, spend and borrow, then they are likely to repeat that cycle without ever stopping to question it.

How the Rat Race Shapes Our Thinking

The rat race showing the worker mindset and earn spend borrow cycle — Many families become locked into the Rat Race without ever questioning the pattern.

In fact, many of us have been conditioned to accept a financial mindset that locks us into what many people call the Rat Race.

Now you may challenge us by saying, what’s wrong with our kids entering the workforce? What’s wrong with spending what they earn and borrowing some more? Honestly, there is nothing right or wrong about it at all. It simply is what it is.

For us though, we are looking for a new direction — one where we have the time to follow our passions and the freedom to give to our family, community and world without constantly worrying about how to pay for it. Our goal is to move beyond a narrow “worker mindset”.

We seek to know how the relatively few financially and time-free people managed to rise above the Rat Race. We want to know what they do that is different. How do they think? What is their conditioning around money? What kind of money mindset have they built?

Why Money Mindset for Kids Matters

What’s more, we wish for our kids to grow up with the mindset of an entrepreneur. It is important to us that they receive a real financial education for kids, not just an education that prepares them to earn a wage.

Financial education for kids does not usually come from school — A financial education for kids often begins at home, not in the classroom.

From what we’ve discovered so far, kids need to start very early if they are to develop an entrepreneurial mindset and the skills needed to manage money and build enterprise. They need role models who can foster different thinking, and parents who encourage and look for opportunities that develop enterprise.

Open discussions about money, business, debt, freedom and opportunity all help to build a better money mindset for kids.

We want our seven children to grow up having choices. We want their pathways to be wide with opportunity. We encourage them to follow their passions and not simply be conditioned into the “earn, spend and borrow” mindset. We hope they will think differently, believe in themselves and develop the habits of people who achieve both personal and financial freedom.

Our Family Is Learning Too

We know we have a challenge ahead of us, because our kids have already been conditioned from an early age — just as we were.

Using Kaitlin as an example, she earns money, spends freely and already has a debt. She is studying hard to go to university with all her friends and then, ultimately, to get a good-paying job. Once again, I’ll point out that there is no right or wrong about this, only that we would like her to see that there are other ways.

It is always going to be a challenge while we still carry some of that same conditioning and mindset ourselves. Although we are striving to change our thinking, we recognise that it will take time and persistence to learn new habits and shift old belief systems.

However, we are very confident that this year is the year that we will have a breakthrough. We have enlisted the help of a Money Mindset personal mentor who is helping us develop a new way of thinking. He is there to help us transform our thinking through our actions — and as we do so, so will our children.

In upcoming blogs we will continue to share this journey with you, including the lessons we are learning about building a stronger money mindset, creating more opportunity, and helping our children develop an entrepreneurial way of thinking.

Key Takeaway: A Money Mindset Can Shape a Family’s Future

Key takeaway: A family’s money mindset shapes how children see work, spending, debt, business and opportunity. Building a stronger money mindset for kids can help children grow up with more choices, wider pathways and a better understanding of enterprise and financial freedom.

We believe that changing a family’s money mindset can change a family’s future.

Where to Next?

What money mindset are your children learning from the world around them?

Money Lessons for Kids: Who Is Teaching Them About Money?

Enterprise For KidsTeam Money Lessons for Kids, Raising Entrepreneurial Kids June 20, 2012July 10, 2026advertising to children, earn spend borrow, financial education for kids, Flynn Howitt, honey enterprise, kids and money, media influence on kids, money lessons, money lessons for kids, money mindset for kids, new from old enterprise, teach kids about debt, teaching kids about money 6 Comments

Kids watching a TV advert showing how advertising shapes money lessons for kids

Money lessons are happening all around our children, whether we notice them or not. If you don’t teach your kids about money, then there are plenty of people out there who will. And not all of them will teach your children what they really need to know.

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Media, celebrities, advertising, peers, schools, banks and family choices all help shape what children believe about earning, spending, borrowing and wanting more. That is why money lessons for kids need to begin at home, in the everyday moments where children ask for things, make choices and learn how money really works.

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Teen magazine showing how media can shape money lessons for kids — Kids are constantly receiving money lessons from media, celebrities, advertising and peers.

Money Lessons for Kids: Who Is Teaching Them About Money?

Our kids are educated financially from many sources, whether we like it or not. Everywhere they go and everything they look at is conditioning them around money.

For example, teenage kids are very influenced by their peers, TV, advertising and social media. They are pressured to want to have all the latest and greatest of everything. AND… they have to have it now!

If you have a teenager in your house, or even a preteen, you will understand this very well. They will tell you that they are the “only” ones in the “whole world” who don’t have one. And if you try to compromise with a cheaper version from Target… well, forget it! Brand name or nothing!

The Money Lessons Children Learn From Wanting More

Many parents fall into the trap of giving in to their kids’ persistent demands. We have… more times than we should have! And the older a child gets, the better they are at arguing their point.

Sometimes parents lend their child the money with the view of having them pay it back when they can afford it. Other times, parents simply pay for the item fully and do not expect their child to pay anything back.

But what is this teaching children?

That is the question we had to ask ourselves when Flynn wanted an iPod for school camp.

Flynn’s iPod Money Lesson

Our son Flynn was preparing to go on a camp with his school. He claimed that ALL the kids would have iPods, and that he wanted to buy one to take on camp.

Flynn Howitt learning money lessons for kids through his iPod goal — Flynn’s iPod goal became a real-life money lesson about earning, choices and avoiding debt.

He counted up his money and found that he was short about $100. He was very persistent in his request, so we decided to sit down and have a conversation with him around the value of money.

Our dilemma was this: if we were to say an outright, “No, we can’t afford it,” then we would be conditioning him with a mindset around lack of money.

On the other hand, if we said, “Yes,” and simply paid for it, then we would be conditioning him with the mindset to borrow, then spend… and he would probably not appreciate it too much.

So…………… we came up with another solution.

Turning a Want Into a Money Lesson

We said, “Yes.” He could buy an iPod. However, we were not able to pay for it.

Instead, we brainstormed ideas with Flynn on how he could raise the $100 himself. Time was of the essence, as he was going on camp in three days.

Together, we came up with several ideas. He could increase the marketing of the honey he was selling through his Honey Enterprise. He could sell some of his unwanted things, such as his surfboard. He could also do a deal with his sister and buy the items she had lined up to sell as part of her New From Old enterprise, then resell them with a mark-up.

The discussion gave him motivation, and we took the punt that if he was really keen for the iPod, then he would make it happen.

The point of all this is that we didn’t automatically say, “No, we can’t afford it,” and we didn’t say, “Yes, and we will pay for it.”

Rather, we put the onus on Flynn to work out a way to achieve his goal without getting himself into debt. We used this opportunity to teach Flynn about money.

Who Is Teaching Your Kids About Money?

In our society, kids are conditioned to earn, spend and borrow from a very early age. This conditioning can carry through to adulthood and tie people to a job, especially when they need that job to pay for the interest payments on their “things”.

That is why money lessons for kids matter so much. If we do not consciously teach children how to think about money, they may simply absorb the messages around them.

Sporting heroes and advertising shaping money lessons for kids — Sporting heroes are often used to influence what children want to buy.

It is hard for our kids to avoid this type of conditioning. Their sporting idols appear on TV advertisements telling them what a great investment they are making if they buy x, y or z… and finish with a trusting wink!

In the same way, celebrities promote all sorts of things, from insurance and jewellery to holidays. Retailers offer low-cost, easy monthly payments for expensive items that people may not really be able to afford.

There goes the “earn, spend and borrow” cycle again.

Advertising Teaches Money Lessons Too

Advertising does not just sell products. It also teaches children what to value, what to want and how quickly they should expect to have things.

For this reason, parents need to be part of the conversation.

When a child says, “Everyone has one,” or “I need it now,” there is an opportunity to slow the conversation down and ask some better questions:

Do you really want this, or do you feel pressured to want it?
How much does it cost?
How could you earn the money?
What would you need to give up to buy it?
Could you buy it second-hand?
Could you create money rather than borrow money?

These simple questions can turn everyday wants into powerful money lessons.

Schools, Debt and Financial Choices

The education system may teach many important things, but practical money education can still be limited. Many young people move towards adulthood without having deeply discussed debt, credit, consumer pressure, business, enterprise, financial freedom or how to make money work for them.

Student debt showing why money lessons for kids matter before adulthood — Young people can face financial pressure before they have learnt how money really works.

As a result, many young people begin adult life already carrying financial pressure. This might come through study costs, consumer debt, car loans, lifestyle spending or the general cost of getting started.

That is why a financial education for your kids before they leave home matters.

The Australian Government’s MoneySmart guide to teaching kids about money is a helpful reminder that parents can start early and make money part of everyday conversation.

Can These Money Lessons Change?

Enterprise for Kids image about changing money lessons for kids — Money lessons can help children see new possibilities.

We can look at life as being a game full of experiences. We are here on earth to play the game.

Yet from an early age, the odds can feel stacked against us achieving personal and financial freedom when we are conditioned to earn, spend and borrow for unproductive things.

Can this change?

Absolutely.

And who is the best person to teach this change to your children?

Well, if you have already achieved financial and personal freedom, then the best teacher is YOU!

And if you haven’t, then find someone who has achieved the type of financial or personal success you would like for your kids. You may even learn something in the process. 🙂

Money Lessons for Kids Begin at Home

The most powerful money lessons for kids often begin in ordinary family moments.

A child wants something.

A parent has a choice.

We can shut the conversation down, pay for everything, lend the money, or turn the moment into a learning opportunity.

Flynn’s iPod story reminded us that teaching kids about money does not always require a formal lesson. Sometimes it simply requires a different conversation.

Instead of saying, “We can’t afford it,” or “Yes, we’ll buy it,” we can ask, “How could you create the money?”

That question changes everything.

Key Takeaway: Money Lessons Are Happening Every Day

Key takeaway: money lessons are happening around children every day. Media, peers, celebrities, advertising and family choices all shape how kids think about money. Parents can use everyday wants, like Flynn’s iPod goal, to teach children how to earn, choose, create value and avoid unnecessary debt.

Where to Next?

Who is teaching your children their money lessons — and what are they learning?