If you're like most parents, you want your kids to grow up to be financially secure. However, you might find it challenging to start the conversations about money that lead to a solid foundation for future success.
According to a 2020 T. Rowe Price survey, 41% of parents experience some anxiety discussing financial matters with their kids. More recently, the 2024 Her Money Mindset survey from Investopedia and REAL SIMPLE found 20% of parent respondents didn't discuss money with their kids at all.
While money conversations can feel intimidating, you don't have to be a money expert to teach your children invaluable lessons about personal finance. Here's how to get the money conversation started, make talks age-appropriate, and weave financial literacy into your everyday parenting.
Key Takeaways
- Sharing age-appropriate money details with your kids helps them to learn the value of a dollar.
- Parents can use books and apps to increase financial literacy in their children.
- Incorporating money conversations into everyday life can reinforce financial literacy and money management skills.
- Avoid fear- or shame-based tactics to scare kids away from bad habits. Instead, keep positive play and practice central to any discussion of money.
Why Talking About Money With Kids Matters
You may think your child is too young to talk about money. However, kids pick up cues about money—and what it can buy—from the world around them. Young children are already influenced by their external environment, from seeing ads on TV and online to hearing peers talk about vacations and toys. These influences shape their tastes, which will inform their perception of money later in life.
Kids need a knowledgeable and loving adult to help them process these influences and align them with realistic expectations.
"Children will learn about money from watching and listening to their parents, whether their parents talk to them about money or not," says Jen Mayer, an accredited financial counselor and co-founder of Fully Funded. Mayer says that talking openly about money—how it's earned, managed, and saved—helps kids understand that resources are limited.
By getting kids involved with hands-on money lessons early, you prepare them to manage their finances independently later. Young people who enter adulthood lacking basic financial literacy are vulnerable to money struggles and get-rich-quick-schemes.
Tip
You can start teaching kids about money as early as when they learn to count. Use cash and coins to teach them math basics. As they age, increase their level of responsibility over household spending.
Age-Appropriate Money Conversations Start Young
The Her Money Mindset Survey from Investopedia and Real Simple found most parents feel their children should learn about money once they are 7-10 years old. Most women respondents who said they don't talk to their kids about money said it's because their children are too young.
However, developmental research shows that children actually start to form emotional reactions to spending and saving money as early as 5-years-old. These attitudes actually translated to real-life spending behaviors later in life, too.
No only can early lessons sink in, but sharing age-appropriate money details with your kids makes them feel included and respected. They see you model transparency, trustworthiness, and responsibility. But it is easier said than done.
A preschooler will grasp very different money concepts than a high schooler, and you might not know where to begin. According to Dr. Traci Williams, a board-certified clinical psychologist and certified financial therapist, you should anticipate that your kids might not immediately understand or engage with the topics you're presenting.
Don't feel that you've failed if your kids don't engage with financial discussions right away.Williams says that when you first start trying to have money conversations "your child may not seem to care and that's OK. At their age, money isn't a priority for them. Continue to share information as the opportunity arises, and try to make it relevant to them and their interests."
Ages 3-5: Play Money
The preschool crowd is still building basic cognitive skills, so keep money talks brief but frequent. Weave them into playtime, daily routines, and hands-on activities.
"Preschoolers can help you count your change and begin learning the denominations of our currency. Play at an imaginary store or restaurant with your toddler or preschooler to demonstrate the process of paying for items," says Williams. "As your child gets older, you can explain how you use money, using trips outside the home as learning opportunities."
Older preschoolers can read the total at the checkout counter, help you pay the cashier, and count the change. These activities help them understand the basic concept of exchanging money in return for goods and services. They also develop solid vocabulary, knowing the difference between coins and cash.
Once kids have grasped these foundational ideas, Mayer says they can benefit from learning to categorize their money—in other words, they can learn that not all the money they receive goes towards spending.
"The three-category system of 'spend, save, give' is a good foundation to help kids learn how to be intentional about their money, and teach the habit of saving from an early age," she explains.
Ages 6-10: Allowance Time
Three-quarters of parent respondents to Real Simple and Investopedia's survey say that children should learn about money during this time (age 7+). Introducing an allowance is one way to start imparting practical money lessons.
If you do choose to give your kids an allowance, you can use it to help them set age-appropriate savings goals, like a new toy, gift for someone, or donation to a cause. Guide them through the process of planning and budgeting.
If you're not into allowances, you can still go with them to open their first bank account. This helps them gain familiarity with banks and all the paperwork that goes into managing their own money.
Williams advises leaning on everyday activities as low-stakes opportunities to introduce money talks. At the grocery store, teach children to compare the prices of products not just by looking at the stickers, but also sizes. On the older end of this age range, kids know enough about math to participate fully in budgeting decisions, coupon clipping, and in-store shopping.
Williams says you can also draw out your kids' motivations by creating a family project around saving for a particular goal, like a special outing or an item the whole family will enjoy. Otherwise, try embedding the same lessons by doing a deep dive into the value of money around fundraisers for their class, scouts, or religious groups.
Ages 11-13: Balancing Wants and Needs
Kids start weighing their own interests and gain an understanding of smart shopping choices in the tween years. When they request the latest toy or electronics, have them compare features, prices, and quality to determine if the value matches the cost. If they have an allowance, help them craft a savings plan and teach them how to shop around for deals—online and in-store.
This is also a perfect time to make them responsible for monitoring their bank account balances. Doing so can help them make better use of gift-giving seasons—do they want grandma to send toys or would they prefer she deposit the value into their accounts, so they can pay for a summer camp or meet a savings goal? Kids can grasp value at this age, which makes it a great time to help them establish a sound compass around what matters most to them.
This is also a good age to introduce money apps and books that they can play with and read independently.
Ages 14-18: Hands-On Practice
Parents have a responsibility to equip teens with independent money management skills. This is an impressionable time in their lives and lessons learned during this phase can be particularly long-lasting. Older teens will start to get offers for college, jobs, and credit cards—all of which will impact their personal finances for the rest of their lives.
Williams says that now is the time to model good money habits. Your kids observe more than you realize, so how you spend your money matters just as much as how you talk about money. Try reading some college savings and career planning books together and discussing whether or not the tips and theories resonate with them. Personal finance isn't one size fits all.
Teens will also benefit from discussions around the emotional aspects of spending and saving. If you're doing it right, this is a time when they will call you out on your own money missteps. This helps them establish their individual money scripts and stories, as differentiated from the ones they inherited from you.
Your own money stories might evolve during this soon-to-be empty nester period; together, you can learn how the job market and economy are changing and how you'll confront them from your different stages of adulthood.
Incorporate Money Into Everyday Conversations
If formal sit-downs to talk finances don't fly with your kids, try teaching real-life money skills on the fly instead. Integrate financial literacy on the daily:
- Big milestones: Help kids understand that paying for a new car, house, or college degree takes years of forethought. It is easy enough to get them involved in saving, but you also need to teach them about debt. Since most of these items are purchased with loans, seize the opportunity to talk about interest rates, repayment terms, and inflation. Since milestone purchases take time to decide, you can stretch out the lessons over weeks or months.
- Online shopping: Let kids research prices for similar items across websites. Help them evaluate taxes, shipping or pick-up, warranties, return policies, and more. Now is a good time to chat about internet safety—keeping credit and debit card numbers safe from identity theft.
- Stores: Let each kid select a few items on the list within a set budget. Then have them find and calculate the total cost of their items, with tax.
- Trips: Traveling to other countries is enriching because it lets kids compare cultures and learn new practices. If you take an international vacation, teach kids about different currencies and let them calculate how much their favorite foods or toys cost in this new place. Help them understand the basics of trade (imports/exports) and why some things are priced higher or lower in different parts of the world.
How To Overcome Common Roadblocks
Even with the best intentions, let's be honest: Money talks get tricky. When you've got financial anxiety or trauma, opening up is hard. Remember, there's no need to be perfect or to know it all. Just showing kids how you overcome money challenges builds empathy and resilience.
Don't Rely on School
Though schools today teach some money basics, most don't dig deep into all the money topics kids will face in adulthood. Only 25 U.S. states has some sort of formal financial literacy education requirements in place for high school students. Real-life financial decisions boil down to accounting and statistics, so it's surprising that both topics get short shrift in schools. This means that money habits have to come from home, and you're going to be their most important teacher.
Don't Tell Yourself It's Too Late
Any age is the right age to start money talks. Use everyday spending moments to weave in quick lessons. With time, keep the conversation going by comparing old prices to new ones and constantly questioning if purchases are really worth it.
It is never too late to start talking about money with your kids, even if they're adults. All too often, parents avoid topics like their own retirement, long-term care, and inheritance plans, which directly affect their adult kids. Even if you're not ready to talk about financial literacy with your children, try talking with them about your life plans and how you intend to fund them.
Tip
Financial planners report that often adult children are caught unawares by the passing of a parent. Be sure to share estate planning documents and bank account or insurance info well before your kids are ever called upon to use them.
Don't Forget That Managing Money Is a Team Sport
Because there's so much shame around money, many people only talk about it in hushed tones. It's easy to think that each individual is the sole person responsible for their money successes or follies, but that's not true. Often, money is managed in concert with others with whom your child might not be familiar.
Managing money means juggling a lot more than just your personal spending and saving habits. Talk with kids about the entire ecosystem around money so that they know how to get money help when they need it.
Frequently Asked Questions (FAQs)
How Can I Start Talking to My Child About Money?
Start money conversations early, using age-appropriate topics.
Weave lessons organically into everyday routines. Use errands, allowance, and family decisions to introduce money topics. Make discussions engaging and relevant. Let kids share opinions, face consequences, and solve minor money problems.
Are There Any Recommended Books or Apps for Teaching Kids About Money?
Check your local library for age-appropriate storybooks about earning, saving, smart spending, and more to share with your kids. You can also try some of these resources:
- Allowance tracker apps: Apps like FamZoo, Rooster Money, and BusyKid help kids visualize savings progress and budgeting in a fun, engaging way.
- Games and workshops: Many credit unions and banks offer financial literacy games, summer camps, and workshops.
- Government resources: The Consumer Financial Protection Bureau creates free financial education resources like this helpful Youth Financial Education curriculum. States like Connecticut offer financial education portals for teachers, parents, and kids.
- Websites: JumpStart Coalition and MoneyConfidentKids offer interactive games, printable worksheets, and parenting tips.
What Are the Common Challenges Parents Face When Discussing Money With Kids?
"If you use complicated terms or go into elaborate detail, you'll lose your kids' interest. Keep it simple!" Dr. Williams advises. Start with basic vocabulary and then work your way up to more complex ideas around debt and investing. This may take years.
Expect your kids to misunderstand, tune out, or ignore you at first. Don't let frustration thwart your efforts. Instead, try to integrate money matters consistently into your daily family life.
A common challenge is balancing how much information about your own money scripts and struggles to share with your children. For each parent, this will be different. Of course, you don't want them to inherit your traumas or bad habits, but you also don't want to shelter them for too long.
Rather than starting from the negative with what you can't afford, try talking with your kids about how you can learn new tricks to expand the positive—what you will be able to do and afford in the future. Teach the value of delayed gratification while improving your money hygiene side-by-side with your kids.
The Bottom Line
You don't have to be a money expert to teach your children about the value of a dollar. Learn alongside your child, teach them how to make sound financial decisions, and point them in the direction of credible resources that can support every part of their financial life.
