How to Talk to Kids About Money

How to Approach Conversations About Financial Choices with Children

Having conversations about money with kids doesn’t have to be daunting. In fact, it can be a fun and educational experience for you both! Here are eight tips to help you approach these conversations with ease:

1. Start Early: Money habits are established by age 7. Begin talking about money when your children are young to help them understand its importance.
2. Practice Smart Spending & Use Everyday Examples: Point out money concepts in your day-to-day life, like when you are at the grocery store or paying a bill. Discuss ways to make smart spending choices, like comparing prices and searching for deals.
3. Make it Relatable: Discuss financial choices in terms of things your child cares about, such as saving for a video game or vacation.
4. Set a Good Example: Show responsible money habits yourself as kids learn by example. Need help? Check out our Simply Better Blogs on eliminating debt and setting up an emergency fund.
5. Teach Budgeting & Savings: Help them create a simple budget for their allowance or money they receive. Talk about the importance of saving for both short-term and long-term goals. This money can be deposited in a youth savings account, which can lead to additional rewards.
6. Introduce the Concept of Needs vs. Wants: Teach them to differentiate between things they need and things they want.
7. Encourage Questions: Be open to answering any questions they might have about money.
8. Make it a Continuous Conversation: Keep the dialogue open and ongoing, adjusting as they grow, and as their understanding of money evolves.

If you are having trouble finding the right words to say regarding a money topic, the Consumer Financial Protection Bureau has you covered. Click here to find guides on how to adapt the conversation to where your child is developmentally.