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Money Talks: Speaking With Your Kids About Finances

Ashley Kilroy8-minute read
PUBLISHED: March 22, 2022 | UPDATED: July 01, 2022

Are you speaking with your kids about finances?

If you’re like most American parents, you understand the importance of having conversations around finance and money. Yet, according to an Edelman Financial Services study, 49% of parents say they don’t know how to have these conversations. It’s also noted that 25% of parents say that they don’t talk about household finances with their children at all.

Since money is often a taboo topic, you may struggle to know where to begin a conversation with your children. But, the more you talk about it, the more comfortable you will become. So, if you’re not having these money conversations with your children, here’s some advice on how you can start talking and teaching them about money. The sooner you talk to your children about financial responsibility, the more likely you will set them up for a successful future.

How Do You Talk To Your Kids About Money?

The first step to teaching your kids about money is by initiating money talks. Money talks are times throughout your day-to-day life that you can discuss finances with your children, as the opportunity naturally occurs.If you are at a loss for how to approach these conversations, we’ve outlined a few tactics to use that will help ease you into these discussions. Start EarlyThe sooner you begin talking to your children about finances, the better chance you have of raising financially confident adults. Investing in your child’s future is one of the greatest gifts you can give them. By beginning these conversations early, your children will become comfortable about money topics. This will open them up to the opportunity to learn successful techniques to manage their finances.You may want to start with small money topics. For example, if your child received money for their birthday, discuss the importance of saving and delayed gratification. Encourage them to set some of their birthday money aside for something they may want in the future. As time goes on, you can begin to discuss more complex financial topics such as purchasing a home or saving for their college education.Starting these conversations at a young age will help your children see that you’re open to money talks. Your transparency may encourage them to ask questions and talk about certain financial topics.Begin With Basic Financial ConceptsStarting with some basic financial concepts can help you and your family ease into conversations about money. Of course, the topics will depend on the age of your children. You wouldn’t want to talk to your 2-year-old about mortgages right off the bat.Choose topics that are both age-appropriate and relevant to your children. For example, you may want to describe budgeting. Explain how resources are limited. Since everyone has a limited amount of resources (or money), they must use their resources wisely. This is also a great time to discuss needs versus wants. Children, as early as the age of 7, begin to notice other kids’ belongings. This will give you the opportunity to explain spending priorities and the importance of living within your means. Be Transparent About Your Money Situation Many parents may try to hide their financial failures instead of sharing them with their children. But, by not sharing your financial failures you’re missing out on an opportunity to let your kids learn from your mistakes. So, if you regret going into debt or not saving enough for their college, tell them about it.Let’s say you accumulated a large amount of debt when you received your first credit card. Share your experience with your children and tell them how it was a struggle to repay your debt. It may be appropriate to go as far as to share some of the sacrifices you had to make in order to become debt-free.Your children will appreciate your honesty and learn valuable financial lessons from your experiences.

How Do You Teach Your Child Financial Responsibility?

Don’t shy away from opportunities to engage your children in conversations about money. Throughout your daily routine, you deal with your finances on many occasions. Since this is the case, make it a point to talk to your children about these occurrences as they happen. It’s a great opportunity to discuss how you prepare for the expenses presented to you, and budget the money you have.In doing so, you will provide your children with a glimpse of the future financial responsibilities they will have.  Learn About Money As FamilyLet’s face it, there are probably some financial topics you’re unsure about. If you’re not a financial expert, you may need to brush up on your financial literacy. You don’t have to know everything, it’s okay to not have all of the answers.So, instead of doing your research independently, try enhancing your financial literacy skills as a family. For example, you may not know much about the stock market and how it works. Take some time with your children to research and explore the ins and outs of this financial topic.Your children may learn more if they know you’re interested in improving your personal financial skills. Also, this is a great way to spend quality time with your kids.Establish Family GoalsLet your children sit in on your household budget meetings or when you and your partner are trying to make a tough financial decision.  Including your children in family money conversations will help teach them the tools they will one day need to apply to their own budget.  Engaging your children in this facet may also give you a different perspective of your money matters.You may also want to set money goals as a family. For instance, if you decide you want to take a family trip in the summer, include your children in the financial planning process. Show them how to budget for the expense and ways they can save or earn extra money to contribute. Showing your children how to plan and achieve their goals will help boost their confidence so that they are able to tackle these issues in the future.

How Do You Teach Your Children The Value Of A Dollar?

It’s difficult to teach your children about money when they live in a world of instant gratification. As a parent, you work hard to meet their continual needs and they often miss out on the behind the scenes work. You know more than anyone else the work that goes into providing your kids with their basic and not so basic needs.


Take some time to remove the mystery of how you are providing for your family, and the finances involved. By creating transparency in all of your dail

Explain How Money Works

y transactions, your children will begin to understand how your paycheck supports their lifestyle.

Here are a few ways you can engage your children in your fiscal routines that will assist them in grasping the value of a dollar. 

Teach your children about income versus expenses. The easiest way to do this is to make them aware of the lifestyle expenses you have. Discuss budget items such as mortgage payments, utility bills, groceries, etc.  You can even go so far as to have them help you balance your budget. Allow them to help you with the simple math of subtracting your various bills from your income so they can see what remains after paying your bills.


Creating awareness of your money habits will enable your children to more clearly grasp how money works. It will also give them a better appreciation for the reasons you say “no” to their extra expenses, and why it is necessary to do so.

Give Your Children An Allowance

Allow your children to take part in their own income management. Give them simple tasks to complete in exchange for an allowance. In doing so, you are giving them a basic education of the employment process.


Once they earn their allowance, have a discussion with them on how they plan to use their money. It’s never too early to impart the wisdom of saving versus spending. Allow them to talk through their desired purchases and use this as an opening to talk about the importance of savings.

Let Your Kids Spend Their Money

While you will want to discuss and advise your children on their spending, it’s important that you allow them to have the final say in the process. If you force them to save their money, there’s a good chance you will be missing an opportunity to teach a valuable lesson.

If your children choose to spend all their money, the next time they have a want you can discuss how they should consider their future needs when spending. This will be a great way for them to start to understand the process of saving. It will also teach them about instant gratification, and how it can result in fleeting satisfaction. Both of these concepts are valuable financial lessons that will resonate and assist your children in the future.

Offer Ways Your Children Can Earn Extra Income

Instead of turning down your child’s request for the newest video game or a shopping spree to their favorite clothing retailer, consider providing them with ways to earn extra money. This will teach your children the important modern practice of “side gigs” and the necessity of working more to earn more.

Be sure to teach them that sometimes extra income is a necessity and not a luxury. Often side gigs supplement income to make ends meet, and are not ways to indulge in fun activities or purchases. Have a discussion about prudent fiscal management and how it’s an important habit that allows adults to spend money on things outside of their basic needs.

Share The Concept Of Borrowing

Introduce your children to the ideas of loans and credit card debt. While you don’t want to encourage your children to go into debt over frivolous spending, sometimes debt is a necessity for the greater good.

Explain the difference between good and bad debt. Educate your children on the difference in a home mortgage loan as opposed to a loan taken to purchase a luxury car outside of their means.

Also, consider teaching your kids about the importance of credit. Emphasize an ability to handle money responsibly when using credit. Lead by example in this area, and teach them how to both use credit and repay debt in a way that is mutually beneficial. For example, if you are making a purchase with a credit card, discuss the interest rate of your card, the perks that come with the use of the card, and your planned timeline for repayment.

Explain why credit cards exist and the benefit they have to the companies that offer them. Likewise, explain how using credit responsibly benefits your family and your ability to take out loans in the future. If it’s been a while since you took a look at your credit report, head on over to Rocket HQ for a free credit report and score.

The Bottom Line

The most important aspect of educating your children on money is being willing to engage them in conversation. Honest discussions allow you and your children to learn about the various aspects of money management together.

As parents, we all want to raise children who exceed our capabilities and accomplish more than we have. To achieve this, we must be willing to provide a foundation of information so that they can grow and expand on our knowledge to reach new heights. So, start your conversations from an early age and begin your children’s success with finances today. For more information, check out our free resources for credit and personal finance.

Ashley Kilroy

Ashley Kilroy is an experienced financial writer. In addition to being a contributing writer at Rocket Homes, she writes for solo entrepreneurs as well as for Fortune 500 companies. Ashley is a finance graduate of the University of Cincinnati. When she isn’t helping people understand their finances, you may find Ashley cage diving with great whites or on safari in South Africa.