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How to start talking to your kids about money at an early age

Does the idea of talking to your kids about money make your skin crawl? A survey on parents, kids, and money showed that over 80% of parents are uncomfortable talking to their children about money or finances. But many parents also wish they’d learned more about money when they were kids.

To break this generational cycle, something has to change. Take a look at these tips and ideas to help produce financially literate kids no matter what age they are. (Psst — talking to your kids about money may not be as scary as you might think!)

Your Guide to Teaching Your Kids About Money

According to one study, only 22% of adults aged 18-24 were financially stable. Other research discovered that 75% of American teens lack confidence in their knowledge of personal finance. They don’t invest, they don’t know what a 401(k) is, and they don’t know the difference between a credit and a debit card.

For parents, these sobering statistics demonstrate how important it is to intentionally teach your children about money. It’s never too early: Additional research shows that by the age of seven, children are already developing money habits.

Children should see you modeling budgeting and saving. Your kids also need to hear you talk about money in a positive way. Don’t be scared to include your child in financial discussions. Walk them through your process when saving for a family vacation, for example, and reiterate how saving money is a great habit that feels good.

Explain how you’re creating a budget for the upcoming month or show them the bills you’re paying. The more you incorporate money into your family’s normal conversations, the more natural it will become.

It’s important for children of all ages to be included in your family’s finances in an age-appropriate way — starting when they are toddlers and continuing until they strike out on their own. Use these ideas, organized by age level, to help as you teach your children about money management.


Even toddlers can begin learning about money and how it works. If you’re out to eat or at the store with grandchildren, teach them the names of coins (but don’t leave toddlers unsupervised with coins, as they may swallow them). Or buy a toy cash register to have on hand so you can play store next time your grandchildren come over.

Let your grandkids observe as you follow a budget at the grocery store, save money (using a clear jar to provide a visual) for something fun, or give to others. While it might not seem as if you’re making a major impact, this crucial developmental stage is when children are building a foundation to form many of their ideas about the world.

Growing Up

Preschoolers can learn to count coins and dollars, or shop for something they want. Give your grandchild five dollars and help them walk through the store, discussing how much each item costs and how much they can afford. Once they’ve made a decision, let them check out and give the physical cash to the clerk.

Children in grades 1-5 should have a basic understanding of what money is and what it does. Now, you can begin explaining how to earn and save money. Children should be encouraged to save at least 10% of their allowance in a custodial or joint savings account.

When children are in 6th-8th grade, they can learn how to read their bank statement and balance their checkbook. Tweens are often worried about purchasing the latest technology or the latest clothes because “everyone else has one.” Discuss the difference between wants and needs.

High Schoolers

High schoolers (9th-12th grade) should be encouraged to get their own job. This will help them learn about valuable concepts such as earning money, making a budget with their income, and taxes. They might be saving for college or choosing to donate some of their money to causes they care about.

By this point your child or grandchild should have a checking account as well as a savings account. You can also consider making them an authorized user on your credit card (they can apply for their own upon turning 18). Handing your teen your credit card might feel scary, but you can closely supervise the process as they learn about paying off credit. Building credit now will help your teen later in life as they try to get an apartment, a house, or insurance.

College or Young Adult

It’s scary to send children out into the world with their own money to manage. Make a point to help them learn about taxes, Social Security, and insurance. If they aren’t already, they’ll soon be responsible for these things on their own.

For young adults who are in college, help them manage their money by creating a budget. Loans, books, and tuition can stack up—you don’t want to blow all of your money on eating out during first semester. College students should continue the good money habits you’ve already helped them establish, like saving money and being careful with credit.

Once your child gets their first career job, they’ll be learning firsthand about things like taxes and insurance. Encourage them to eliminate any debt they may have accumulated (such as student loans) and to start saving for retirement. An emergency fund is important to create, too. And for some people, such as anyone who is self-employed, setting aside money for taxes or paying estimated taxes throughout the year is helpful.

Good Money Habits For Life

Teaching your kids about money doesn’t have to be scary or difficult. With a little practice, it can simply become a normal part of your everyday life — and your kids will thank you later as they enter the world with a strong financial foundation.

Looking to create better financial habits for the whole family? Speak with a Bankers Life Securities financial representative, who can help you find the stability you’re looking for. Find someone near you today!

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