Sorry, you need to enable JavaScript to visit this website.
Skip to main content

Wednesday, July 17, 2024

Why it's important to talk about money with your kids

Why it's important to talk about money with your kids


As a parent, there’s no shortage of tough topics to talk about with your kids. Yet, for many families, the idea of discussing finances can feel toughest of all. While you might feel nervous or overwhelmed initially, it’s so important to talk about money with your kids – and it might be easier than you think.

Let’s explore the benefits of talking about money and ways that you can get those conversations started as soon as today.

The benefits of talking about money

So many of us grew up in the dark when it came to money. Empower’s Money Talks research reveals a whole lot of silence: Only 3 in 10 adults learned about budgeting growing up, and most of us still don’t like to talk about money, even as adults.

While you might have grown up hearing nothing but silence when it comes to dollars and cents, there are benefits to having money conversations with kids.

Financial knowledge is power

One of the most important reasons to talk about money with kids is to help them develop a healthy money mindset. Many people grow up with a scarcity mindset, or the belief that resources are limited. With this mindset, people can be jealous, overly competitive, or even feel threatened by others and their success.

Talking about money in positive ways early on helps kids and teens cultivate an abundance mindset. They will learn that they can earn money through hard work. With time and effort, they can earn more money and use that money to help reach their goals.

With this mindset, kids and teens no longer see money as the ultimate goal. Instead, it becomes a tool to help achieve short-term and long-term goals. This healthy perspective can set them up for a lifetime of success by teaching them about goal setting, delayed gratification, determination, and even entrepreneurship.

Modeling positive behavior to kids

Are you worried that you don’t have your finances all figured out? That’s OK, too! In fact, letting your kids see that managing money is a long and sometimes winding journey is important.

One of the most important ways to talk about money with kids doesn’t actually involve saying anything. Instead, let your actions speak for you.

Don’t feel like you need to scroll through your banking apps or pour over net worth charts to model money behavior. Instead, show your kids developmentally appropriate real life applications for money management.

Start sooner than you think

Maybe you’re open to talking about money, but you think your kids are too little. But there are plenty of opportunities in day-to-day life to teach young kids about finances.

Take your toddlers grocery shopping, and use that as an opportunity to discuss needs versus wants. What might start as a conversation about a lollipop or an extra toy can transform into richer conversations about priorities as your kids get older.

You can also use those grocery trips to explore budgeting when kids get older. Have them help you set up a meal plan and write out an ingredient list. Then, kids can look at different weekly ads to do some comparison shopping. Before you know it, your child will have a handle on how sales work, what unit pricing is, and so much more.

They are learning real life skills and seeing money management in action. All of these skills will transfer beyond the grocery store walls, setting them up for a future where finances make more sense.

Work as a team

Another way to model positive money behaviors for your kids is to work as a team. Have a conversation about a short-term goal you all share. Maybe it’s a new TV or gaming system you can all enjoy. Perhaps it’s a swing set for the backyard. Or possibly it’s even a vacation.

Once you’re in agreement about your goal, estimate how much it costs and set up a sinking fund. Then, everyone can brainstorm ways to contribute. Maybe you commit to setting aside part of a bonus from your job. At the same time, your kids can sell old toys and clothes or set up a lemonade stand.

With everyone pitching in, kids will see the power of setting goals and saving. They will also have the knowledge and confidence to have healthy conversations around money in the future when they start families of their own.

Tips to getting started

No matter how you decide to talk about money with kids, the most important thing is to just get started. If you’re worried about how to jump in, remember these tips.

Be honest

Don’t know how to track your net worth? Don’t sweat it (and we can help!). Behind on your bills? So are many Americans. You don’t have to have a million dollar portfolio to discuss money.

Maybe money has always come easy to you, or maybe you are just figuring it out. Perhaps you’re somewhere in between. Clueing your kids in that this is a topic you are still learning about is really important. While we tend to feel like we need to have all the answers, being honest can actually make your conversations more relatable and authentic.

Share, don’t overshare

As much as it is important to be honest, you also don’t want to overshare. Kids don’t need to know about every penny in every bank account. Instead, discuss money in age-appropriate ways.

You also want to try to keep the conversation positive, or at least productive. Otherwise, you run the risk of making money a source of tension and anxiety.

The more relatable and concrete your conversations are, the easier they will be for your kids to understand. Grocery shopping, party planning, or decluttering are all easy-to-understand ways that kids can see money in action.

Include, don’t overwhelm

Once you start discussing money, it’s easy to want to talk about money all the time. This is especially true if you find that your initial conversations are going well. But by focusing on finances all the time, you can also put a lot of pressure on your child.

You don’t want them to become laser focused on money or develop a scarcity mindset. Instead, you want to help them see how money is a tool to help them achieve their goals. Keep the focus on their goals and other aspects of your lives, reminding them that money is a tool to use along the way.

Final thoughts

Money overlaps with almost every aspect of our lives, and yet it is a major blindspot for many young (and old!) adults. More than half of Americans say that money wasn’t discussed when they were growing up.

By opening yourself up to the idea of talking about money with your kids, you are giving them an invaluable gift. In addition to helping set them up for more financial success, you can foster a healthy mindset around hard work, goal setting, and abundant thinking. Breaking the silence around money can be difficult, but it certainly pays off.


Andy Hill, AFC®


Andy Hill, AFC®, is the award-winning family finance coach behind Marriage, Kids, and Money, a platform dedicated to helping young families build wealth and happiness.

Author is not a client of Empower Advisory Group, LLC, and is compensated as a freelance writer.

The content contained in this blog post is intended for general informational purposes only and is not meant to constitute legal, tax, accounting or investment advice. You should consult a qualified legal or tax professional regarding your specific situation. No part of this blog, nor the links contained therein is a solicitation or offer to sell securities. Compensation for freelance contributions not to exceed $1,250. Third-party data is obtained from sources believed to be reliable; however, Empower cannot guarantee the accuracy, timeliness, completeness or fitness of this data for any particular purpose. Third-party links are provided solely as a convenience and do not imply an affiliation, endorsement or approval by Empower of the contents on such third-party websites.

Certain sections of this blog may contain forward-looking statements that are based on our reasonable expectations, estimates, projections and assumptions. Past performance is not a guarantee of future return, nor is it indicative of future performance. Investing involves risk. The value of your investment will fluctuate and you may lose money.

Certified Financial Planner Board of Standards Inc. (CFP Board) owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™, CFP® (with plaque design), and CFP® (with flame design) in the U.S., which it authorizes use of by individuals who successfully complete CFP Board's initial and ongoing certification requirements.