Financial Fundamentals Blog

How to Talk to Kids About Money: Practical Tips and Tricks

A mother helping her two children with their homework


April is Financial Literacy Month, which offers a great opportunity to discuss the ins and outs of money with your children. Here are a few ways that you can begin to have a conversation about finances, how to manage them and how to set goals so that they’re on their way to a successful financial future.

Have an open, ongoing conversation
Let’s start by acknowledging that there are conversations that can seem too difficult to have with our children. In fact, a 2015 T. Rowe Price study found that 41 percent of parents surveyed avoid talking to their kids about money altogether, while more than a quarter of those surveyed said it’s not important for kids to be involved in family finance discussions. While your child probably shouldn’t decide the family’s budget for the year, it can be helpful to let them know what can and cannot be afforded within that budget. It’s a great lesson to explain that there are choices to be made with money, and helps illustrate the value of certain items. Learning early on the value of a dollar could prevent them from making mistakes later, like spending their paycheck on non-essentials before the rent is paid.

Let them practice with their own spending power
A 2016 study by American Certified Public Accountants revealed that approximately 70 percent of parents give their children an allowance. Doing so at an early age – experts recommend starting around Kindergarten – provides children a better understanding of how to manage the money they earn. The same study showed that children receive an average of $67.80 in allowance monthly. While this number, as well as the frequency and method, are entirely up to you, take into consideration what you expect that allowance to cover. Would you like them to use it as lunch money for the week? Or, is it to cover their extracurricular activities, fun with friends, or bigger ticket items like clothes and shoes? Of course, how much you give them is not necessarily the focus, but how you talk to your children about how to use the money they have.

Teach them how to make money
An allowance is important to getting your children started with handling money; making money on their own takes it a step further. This assists with value determination by giving them the chance to think in terms of how many hours they would have to work to afford a specific item. If they’re old enough, encourage – or even require – them to have a part-time job that doesn’t interfere with their schooling or extracurricular activities. If not, maybe there are a few “jobs” around the house in addition to regular chores that could earn them an extra dollar or two. Is there something your child is interested in that could turn into a business? For example, babysitting, neighborhood yard work, or even a craft they enjoy that could be sold through an online shop.

Help them create their own budget
They have the money, now what to do with it? Show them how to budget for their own regular or upcoming expenses using real-world examples for them, such as a birthday gift for a friend, a uniform for a sport they play or movies with friends. Incorporate into that budget some long-term savings goals. Is there a new video game or cell phone they want? Help them calculate how much money they have to save for a period of time to afford it. Have them write it down, or track it in an app, to keep a record. By doing so, you can help them think long-term about money, which could be a game-changer when it comes to bigger savings goals such as a car, a college education or a house.

Open a savings account for them
Not only does it give them a safe place to keep their money, but it allows them to earn some interest, which can be a great incentive to saving. Look into some age appropriate savings accounts, such as Dollar Dog Kids Club for children up to age 12 or Cha-Ching Teen Club for those ages 13 to 18. Both offer a wide variety of incentives and age-appropriate educational resources that help take learning about money one step further.

In the end, teaching your children about money comes down to having honest conversations with them while also giving them real-world examples about how to sensibly manage their income and expenses.

For a more in-depth look at Talking to Your Kids About Money, please visit Once you proceed to the KOFE site, select publications from the KOFE Table drop-down menu. 7 17 has partnered with KOFE (Knowledge of Financial Education) to provide free financial education tools to help support members’ long-term financial health. Resources include publications, videos and more. Plus, you have free access to financial coaches, seven days a week! 



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