It’s hard to know whether your kids are actually listening to you. (How many “Get off your screens” have met deaf ears?) But when it comes to money, kids are paying attention. In fact, personal finance know-how children glean from their parents has real financial benefits: Kids who’ve discussed money with their parents are more likely to have a budget, an emergency fund and a retirement account as young adults than those who haven’t.
Unfortunately, only 15% of parents said they spoke with their children more than once a week about household finances, according to the CNBC + Acorns Invest in You survey. And some 24% talk to their children less often while 31% never do. And if they do talk, a T. Rowe Price survey found that 30% of parents are more likely to do so with their sons (versus 16% with their daughters). “This can send the message that money and financial goals aren’t a priority for girls, leading to women who lack confidence managing money,” says Judith Ward, a senior financial planner with the investment firm.
That’s why New Jersey mom-of-two Kathryn Hively started talking money with her daughters early. “I want my girls to feel in control of their financial health, unafraid to ask questions when they don’t know the answers,” she says. When her girls were small, they got to keep pocket change if they counted it correctly; when they wanted to buy a toy, the family price-checked online first; and starting at age 5, the girls got an allowance that matched their age that they divided between Save, Spend and Share jars.
That’s a fantastic start, says Ashley Noto, SVP of product at Greenlight, a prepaid debit card for kids. “As kids get more practice earning and spending, they’ll better understand the difference in buying that $5 snack versus saving for the more expensive Lego set, which enforces the benefits of saving for the future,” Noto adds. Here, more ideas to get you—and your kids—comfortable discussing money matters at any age.
Talk while you shop. There’s no better place than the grocery store to have a stealth lesson on needs versus wants. “While shopping, explain to your child that first, you’re going to buy what you need, like vegetables, and if there’s money left, you might consider a couple wants,” says Beth Kobliner, financial literacy advocate and author of Make Your Kid a Money Genius (Even If You’re Not).
Consider handing kids cash. Whether it’s souvenir money or a budget for a bedroom redo, use cash. “Because physical dollars are finite, it’s a great tool for teaching the value of money and learning to make choices about what they buy and what they put back,” Kobliner says.
Offer an inside scoop. Invite tweens and teens to listen in as you make big decisions. Buying a car? Talk about prices at different dealerships, how much you plan to offer, how you shopped for an auto loan. Says Kobliner: “Your child will learn valuable lessons about negotiating and trade-offs we must make when buying something big.”
Money Apps for Kids
Think of Greenlight as a way to app-ify allowance, based on a debit card that’s funded by parents with customizable everything—dollar amounts given, where and how kids can use those dollars, chore-based controls and (our favorite part), parent-paid interest for money saved. greenlightcard.com.
Since 2004, You Need a Budget, called “why-nab,” has served as a flexible and effective tool to help people control spending and saving. Now, YNAB offers a free year to college students (annual plans cost $84, after a free trial period of 34 days). youneedabudget.com/college.
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Holly Pevzner is a writer, editor and content creator. She’s written for Parents, EatingWell, Everyday Health and more.