One of the mistaken pressures parents often feel is that they need to teach their kids about money. It comes from a good place—parents want their kids to be financially responsible—but the reality is that many people who start out well in childhood end up struggling with money as adults. But is that really the whole story?
The problem is that teaching money management is often like teaching a kid about driving by only talking about gasoline. Yes, a car can’t run without gasoline, but having a lot of it isn’t the point of driving. The purpose of driving is to navigate the road safely and get to your destination. In the same way, financial wisdom is about much more than just having money—it’s about how you use it, how you make decisions, and how you approach your future.
The Limitations of Passing on Financial Wisdom
When one generation passes down wisdom, sometimes it’s not as wise as we think. More often than not, it’s shared with love and good intentions, rather than as a sales pitch. But wisdom should come from someone who understands the specific situation of the person they’re advising. What worked in one era may not be relevant today, and new questions often arise that previous generations didn’t have to answer.
For example, many parents will know the difference between a TFSA, RRSP, and FHSA, and how each should be used in different situations. Financial products evolve, and what worked for one generation doesn’t always translate to the next.
Everyone develops wisdom based on their personal experiences, which are unique. These lessons may or may not be transferrable. For instance, living through a decades-long decline in interest rates doesn’t help the next generation, who may experience the opposite. Or, if you had a mortgage at 20%, you may have learned that paying it off is the best way to grow your wealth—but when your mortgage rate is 1%, that advice doesn’t apply anymore. If you owned real estate during one of the most profitable periods in history, owning property may seem like the solution to every financial problem. But for the next generation, the reality may be different.
If you graduated from school to double digit unemployment, you developed a perspective from scarcity of employment that is not true today. What works when jobs are scarce is likely not useful when jobs are plentiful. And if you received a large inheritance, your financial situation was influenced by factors that might not be repeatable for your kids. The key point here is that passing on wisdom has its limitations—especially when the circumstances and realities are so different.
Money is Not the Answer to Happiness
While I’m not trained in counseling or soft skills, I can confidently say that money is not the long-term answer to happiness. Many people create the fallacy that if they just had enough money, their problems would disappear. It’s a convenient way to avoid dealing with the harder parts of life. But the truth is, many studies show that sudden wealth is more often a burden than a blessing. It’s rare to find a lottery winner who, a few years later, is in a better place than they were before their win.
Teaching the Right Life Skills
The real issue we see in the next generation isn’t about money—it’s about life skills. It’s about teaching kids how to accomplish goals, how to be self-sustaining, and how to make decisions that help them thrive long-term. These skills are far more important than knowing how to balance a budget or invest in the stock market. The ability to think critically, set goals, and follow through with discipline is what leads to long-term success and personal contentment.
Kids don’t just learn by what you tell them—they learn by what you show them. If you demonstrate responsible money management and decision-making, that will do far more for a child than any lecture. In fact, sometimes the next generation is shaped more by what the previous generation did wrong. They learn by reacting to what they see as mistakes and deciding to correct them. They take ownership of their own lives, which leads to true growth.
The Biggest Weakness: The Inability to Defer Gratification
One of the most significant human weaknesses that leads to money dysfunction is the inability to defer gratification. People are often unwilling to wait for something they want and will rationalize their decisions to justify taking from the future to get something now. These rationalizations can range from “I deserve this,” to “my friends have this,” to “buying this will make me happy (at least for now).” Companies know this and exploit it, making it easy to overspend so they can profit from you right now. This shows up everywhere—from “buy now, pay later” options to the classic “this car is only $46 a month” offer, even though it simply increases the loan you’re paying off.
The only way to truly combat this is to raise the next generation to understand this balance; teach kids about the trade-offs between short-term desires and long-term goals. If someone is prone to short-term thinking, a long-term savings plan won’t be persuasive to them. Instead, you might have more success pointing out the long-term consequences of following the crowd and making short-term decisions. As I’ve told many kids I’ve coached over the years: if you want an uncommon outcome, you have to live an uncommon life. Living within your means, setting realistic goals, and staying disciplined are all part of this uncommon path.
Teach Critical Thinking, Not Just Financial Tips
At the end of the day, the most valuable thing we can teach kids isn’t about specific financial strategies or products—it’s about life skills like delaying gratification, being resilient, and developing grit. These qualities are essential for achieving long-term goals, whether those goals are financial, personal, or professional. It’s about teaching them to stay focused, push through setbacks, and understand that success rarely comes overnight. Instead of simply teaching your kids about money, focus on helping them build the mental and emotional strength to stay committed to their goals, no matter the obstacles. With these skills, they’ll be better equipped to face life’s challenges and create their own path to success.
In closing, stop teaching your kids about money and concentrate on the stuff that matters. If you’re successful at that, in the end the money thing will work itself out.
