Wouldn’t it be great if financial literacy was taught in grade school alongside history and science? Unfortunately, that’s not the case—which means it’s up to us parents to teach our children the basic financial concepts that’ll drive their decision-making for decades to come.

While there’s no textbook or particular curriculum to follow, below are a few easy tips to get your kids thinking about money in a positive and enriching way.

Tip #1: Talk Open, Honestly, and Often

I’d venture to guess that growing up, the topic of money was taboo (at least to some degree) in your house. While families nowadays are more open to talking about things like money, you may still feel uncomfortable opening up about your financial life with your kids (especially when they’re young). 

But in reality, kids have the capacity to learn basic financial concepts much earlier in life than we give them credit for. Better yet, the sooner I start talking about money with them, the more prepared they’ll be to make healthy financial decisions by the time they become young adults.

So don’t be afraid to include even your youngest family members in ongoing discussions about your household budget, savings goals, investment strategies, and other finance-focused discussions. Give them the opportunity to ask questions and give their input. For your older kids, it may even help to share some of your past money mistakes or regrets so they can better understand the real-world repercussions of making poor decisions.

Tip #2: Encourage Them to Put Money Management Into Action

When my kids were young, I started giving them an allowance of $6 a week. Here’s how I divided the money:

• $4 was for spending (fun money!)
• $1 was set aside for giving
• $1 was put into a savings jar

I found that the key to getting the kids excited about putting money into a “savings account” every week was really no different than the advice I share with my clients every day. Rather than focus on the money itself, I encouraged them to pick a goal that they can use to motivate them to save regularly. (In case you’re curious, it is saving up for a car when they turn 16!)

Tip #3: Don’t Be Afraid to Talk Debt

Credit card debt is a huge issue in America. By the end of 2023, we were at a 25-year record high of $1.129 trillion in credit card debt owed from borrowers across the country. Unfortunately, credit card offers are designed to entice young spenders who don’t always understand the ramifications of taking on debt.

One way I started introducing the idea of debt to the kids is through an “I owe you” (essentially small loans). If we’re out somewhere and one of the kids doesn’t have enough money to buy a toy they really want, I give them the option to borrow money to pay for it. I put an “I owe you” in writing, and they then pay me back with the money they receive from their allowance. This is also a great way to initiate more conversations about the repercussions of impulse spending, and it helps them experience first-hand the difference between instant (and often fleeting) gratification and long-term satisfaction.

Tip #4: Help Them Open Accounts

When I felt like my kids were old enough to put the money habits I’d been practicing into play, I helped them open bank accounts and learn how to use their first debit cards. I chose a kid-focused financial platform called Greenlight, but there are plenty of options for your family to research and choose from. Whichever institution or platform you go with, just be sure to review what sort of oversight and security is available for parents.

If your kids are a bit older, say high school age, consider helping them open a credit card (or adding them as users on yours). Not only will this enable them to start building a credit score, but it can also help them learn about the allure and drawbacks of credit cards while still under your supervision.

Remember, You’re Doing Great!

There is no perfect, one-size-fits-all way to start introducing your kids to money and financial literacy. You’re already doing a great job by taking the initiative to have these conversations and get them excited about saving. The earlier you can start introducing and practicing basic money management with them, the better. 

If you need help finding ways to discuss financial concepts with your kids, don’t hesitate to reach out to your advisor today.