Teaching Children to Be Smart Consumers: A School Psychologist’s Guide for Parents

As a school psychologist, I often remind parents that financial literacy isn’t really about money—it’s about decision-making, impulse control, critical thinking, and long-term planning. Every purchase a child observes or participates in is an opportunity to build these skills.

In a world where children are constantly targeted by advertising, influencers, and instant-gratification messaging, teaching them how to be smart consumers is one of the most protective life skills we can offer. The goal isn’t to raise bargain hunters or future stock traders (although there is nothing wrong with that) —it’s to raise thoughtful, skeptical, and informed decision-makers. And while fads come and go, we're going to continue to live in a capitalistic society in which money walks...and you know the rest.

Below are developmentally appropriate ways to teach children how to evaluate price, quality, reliability, negotiation, and even investing—skills that will serve them well into adulthood.

Start With the “Why,” Not the “No”

Children learn best when they understand why a decision is made. Instead of saying, “That’s too expensive” or “We’re not buying that,” narrate your thinking:

• “We’re comparing prices to see where our money works the hardest.”

• “This one costs less, but it breaks faster—so it’s actually more expensive over time.”

• “Let’s see what the data says before we decide.”

This models metacognition—thinking about how we think—which is a key executive functioning skill.

Teaching Children How to Find the Best Price (Using Reputable Sources)

Children are naturally drawn to the cheapest option or the flashiest one. This is where you introduce the idea that price and value are not the same thing.

Strategies by Age

• Young children (5–8): Compare two prices visually. “This one is $10 and this one is $15. Which one costs more? Why might someone still choose it?”

• Tweens (9–12): Introduce online comparison tools and sales tracking.

• Teens: Teach them to factor in shipping, warranties, return policies, and long-term costs.

Data-Based Websites to Teach and Use Together

• Consumer Reports – Shows reliability, safety data, and long-term performance based on testing and user data.Teach children: “We don’t just trust ads—we trust evidence.”

• Better Business Bureau (BBB) – Helps evaluate company trustworthiness, complaint history, and resolution practices.Teach children: “How a company treats customers matters.”

Let your child help look up a product. This turns shopping into a research project rather than an impulse decision.

Teaching Product Reliability and Effectiveness

This is where you teach children to ask critical questions:

• “How long will this last?”

• “What do reviews say about problems?”

• “Is this a brand known for quality or just popularity?”

Explain that influencers and ads are paid to persuade, not to educate. This helps children develop healthy skepticism without cynicism.

A Powerful Rule to Teach

“We don’t trust one opinion—we look for patterns.”

Show them how dozens or hundreds of similar reviews tell a more accurate story than one glowing testimonial.

Teaching Negotiation as a Life Skill (Not a Power Struggle)

Negotiation isn’t manipulation—it’s communication, compromise, and perspective-taking.

How to Practice Negotiation With Children

• Let them negotiate allowances, chores, or purchase timing.

• Teach them to present a case:

  • What do you want?

  • Why is it reasonable?

  • What are you willing to give up?

For older children, discuss real-world examples:

• Negotiating price at flea markets or garage sales

• Asking for student discounts

• Comparing service plans or contracts

This builds confidence, emotional regulation, and self-advocacy.

Teaching Research Skills Over Emotional Spending

Impulse buying is driven by emotion. Smart consumer behavior is driven by delayed gratification.

Teach children a simple rule:

“Big purchases sleep overnight.”

Have them:

1. Write down what they want

2. Research it

3. Revisit the decision later

Often, the emotional urgency fades—and that’s a powerful lesson in self-control.

Introducing Investing as “Putting Money to Work”

Children don’t need to understand markets to understand growth over time.

Developmentally Appropriate Investing Concepts

• Younger children: “Money can grow if we don’t spend it right away.”

• Tweens: Explain interest, dividends, and risk in simple terms.

• Teens: Introduce index funds, compound growth, and long-term investing versus gambling.

Use visuals, charts, or simulations. Emphasize:

• Long-term thinking

• Patience

• Diversification

• Avoiding “get rich quick” thinking

The psychological skill here is future-oriented thinking, which strongly predicts adult success.

Teach Ethical and Values-Based Consumption

Being a smart consumer also means being a values-based one.

Ask questions like:

• “Do we want to support this company?”

• “How does this product impact people or the environment?”

• “Is cheaper always better?”

This helps children integrate ethics, empathy, and responsibility into financial decisions.

What Children Really Learn From These Lessons

When parents teach consumer skills, children aren’t just learning how to shop. They are learning how to:

• Think critically

• Regulate impulses

• Evaluate evidence

• Advocate for themselves

• Plan for the future

• Resist manipulation

These are executive functioning skills that influence academic success, relationships, and mental health.

Final Thought

You don’t need formal lessons or spreadsheets. You just need to slow down everyday decisions and bring your child into the thinking process. When children grow up watching adults pause, research, question, and choose intentionally, they don’t just become smarter consumers—they become more grounded, confident adults. And that’s a return on investment no market can outperform.

One last idea I always share with children, teens and young adults is "Everything for sale is negotiable." When diving deeper into this idea, they learn that prices are appointed by people, and not some universal end-all be-all entity. Therefore, not only car prices can be negotiated but also appliances, clothing and even medical bills.

David Krasky is a licensed school psychologist and author of Raising Future Adults