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3 Ways to Talk to Your Kids About Money

3 Ways to Talk to Your Kids About Money

May 09, 2022

It’s never too early to start money and finance conversations with your children or even grandchildren. Recent data shows that nearly 74% of teens desire to be financially literate, and 86% want to learn how to invest.1

How to Start

It all begins with a candid conversation regarding finances. By demonstrating your openness to discussing what many consider a "taboo" topic, you're also modeling how to approach finances for your young learner. They’ll learn to view financial issues and goals clearly with little to no stress.

Children Learn by Doing – Children learn best by doing. When you give your child an allowance or a small amount of money to manage on their own, they will be more invested in learning smart financial habits. Consider giving your child a monthly allowance or opening a savings account at your local bank to save any money earned from working or gifted to them. Gifts like birthday money or money earned from working can add up quickly. In doing this, your children are learning how important it is to have savings tucked away but can also introduce how interest works.

Share Your Family Budget – In addition to learning the importance of saving, it’s critical to teach your kids about the basics of budgeting. Educating your children on how much basic household necessities cost by showing them examples of your household bills like heating and air or electricity is a simple place to start. If your children are older, you can include them in budgeting for your monthly mortgage payment and how cash flow works in your household through your job and/or your spouse’s job. Through this, your children can learn the value of a dollar and how much it costs to live in 2022.

Have Open and Honest Conversations – Having open and honest conversations with your kids can be more advantageous to their future than keeping them in the dark to shelter them from stressful news. It’s common for parents to want to hide their financial difficulties so their children remain confident but, if possible, find small ways to share information with them. Celebrate paying off high-interest credit card debt and explain its significance to the household. These difficult conversations around debt and budgeting will allow you to set your child up for a sound financial future by providing them with the necessary tools to succeed. 

A Bright Future

Children who are taught personal finance from a young age are more likely to secure lower-cost loans and grants when paying for college and less likely to rely on private loans or high-interest credit cards.3 When money discussion begins early, kids are well-informed to make better financial decisions when they turn eighteen.

At DKS, we're always happy to help educate and support our future generations.

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