How Do You talk to Kids about Money? (Money Conversation Guide)

How do you talk to kids about money? I help guide you with when you should talk to your kids about money, how to discuss things like wealth and your job, and give you some fun money conversation starters for kids.

mother on couch, smiling, talking to teen, text overlay "guide: how do you talk to your kids about money?"Money: the last frontier (cue the Star Trek opening music).

Not really.

But certainly, in conversations.

It can be really difficult to bring up the topic with other adults and with your own kids (and just think about how difficult it can be for kids to bring up their burning money questions to you, specifically if they've picked up on the idea that it's not a topic that is eagerly discussed).

It's not your fault, Mama Bear. Chances are good that money conversations weren't blooming in your household growing up, either.

When I thumb through the mental archives of my own childhood, I can barely remember having a money conversation with my parents (outside of the usual, “can I have $7.00 for this field trip,” and “I need a new pair of sneakers, Mom,” of course).

What are things I held back on? I knew about this thing called “investing” when I was a teenager, and desperately wanted to get in on the action. So, I had my stepmother drop me off at a bookstore and I purchased a book on investing. But feeling like a conversation about that with my parents was encouraged would have been very helpful as well (not to mention the amount of money I'd have in my IRA today if I had started back then!).

The good news? This is an area that you can certainly change, no matter what the reason for not having money conversations in your household is. So, let’s talk about how to talk to your kids about money.

How Do You Talk to Kids about Money?

Sooo…how do you talk to kids about money? How do you start the conversation, and what do you keep in mind?

To be honest, I think you should keep things simple. Here’s a few pointers to help:

  • Keep it age-appropriate (which really means, development-appropriate, as kids develop at varying speeds)
  • Keep it in context
  • Wrap money conversations around THEIR money goals, whenever possible
  • Remember: “connect before correct”

Let's dive a bit deeper into that “connect before correct”, before moving onto the other ones.

In her book, Positive Discipline Parenting Tools, Jane Nelson writes about the need to connect with your kids before correcting them, something that I think resonates right on through when having money conversations with your kids:

“Extensive research has shown that we cannot influence children in a positive way until we create a connection with them. Alfred Adler knew this when he emphasized the importance of using encouragement to fulfill the basic need to belong.”

Your kids are going to make so many mistakes with money. All under your watchful eye (sometimes, without you even knowing it).

And if you give them an allowance? Then it might be even harder for you to not try and correct them at every point in time – because it kind of still feels like your own money (and who likes to “waste” money)?

But I think to connect with your kids over money FIRST, before you correct their many,  many, money blunders, is going to go a long way.

Doing things like sharing your own money mistakes with them, holding a more mentorship parenting space vs. management parenting space, and using the fun money conversation starter questions I created will help you to connect with your child over the topic of money. Then, they’ll be more willing to listen and take to heart the advice you are dying to give them.

Another fantastic resource I'll share with you about how to talk to kids on any subject is How to Talk so Kids Will Listen, and Listen So Kids Will Talk.

Let’s go more into detail about these pointers by using two money topics that get us parents a little queasy when the kids bring it up: wealth, and your job.

How to Talk to Your Kids about Wealth and Your Job?

Some financial concerns you might come across at this age of a kid’s development is how to talk to your kids about wealth, and how to talk to your kids about your job. These are very valid concerns!

Kids are generally more sensitive and aware of wealth differences among their peers than they were when they were younger. When talking about your job, you don’t want to give them the impression that you’re “rich” (because, let’s be honest, if our parents had told us they were making $65,000/year at age 8 or 10, we would have thought they were rich and could afford to give us anything we wanted)!

So, when talking about money topics like wealth and your job, you want to give your kids both age-appropriate information AND context of how that money is used so that they can understand what that information means in the “real world”.

For example:

  • you wouldn’t tell your preschooler that you make $65,000/year. They’re just too young to really understand anything about that (they barely just learned about quarters!).
  • if you were to tell your child or teenager that you make $65,000/year, you wouldn’t leave out the context to that, such as the bills and living expenses that you’re responsible for. That’s because if you give them salary information without expenses, you’re going to make them think you ARE rich. When, in reality, you’re not (well, at least not to our country’s standards; globally, you would be!).

Hint: The reverse also doesn’t do well – just telling kids about bills and living expenses without telling them that you make sufficient money to cover them can cause undue anxiety and worry.

Having given you all that to think about, let me leave you with some talking pointers to help with these money discussions.

  • How to Talk to Your Kids about Wealth: Wealth is neither good, nor bad. And wealth is not a measurement of the income that you make – it’s a measurement of what you keep and how it grows, or the income and assets that a person accumulates. Wealth is also relative to things like the cost of living where you live, the people around you, the culture you live in, etc. Just have your kids go through the Global Rich Calculator with their allowance, and see how “wealthy” they are compared to people in other countries (even though they probably don’t feel that way).
  • How Do You Talk to Your Kids about Your Job: You don’t need to reveal your salary to your kids. To get around this, you simply need to shift the conversation to one where you tell your kids that your income is enough to cover your financial responsibilities, such as paying for rent or the mortgage, for food, and for school clothes, plus to splurge a little, such as on soccer fees or Girl Scout dues. It’s likely they may keep pushing for actually digits, in which case you can look over the Bureau of Labor career site with them, where average salary information for various jobs is given.

When Should You Talk to Your Kids about Money?

You might be wondering when you should talk to kids about money. Honestly? I believe money conversations start at preschool age, and go all the way through to young adulthood.

Over the years (and especially if you’re diligent with talking to your kids about money), your kids will:

  • Go through different development stages
  • Need to use money in different ways
  • Understand money in different ways
  • Grow in financial capability

The good news is that I’m going to help guide you through some really important money conversation topics to cover at various stages of your kid’s life.

Preschool Money Conversations – Talking to Preschoolers about Money

Preschoolers are just fascinating. I have a preschool-aged child, and the way his mind works is just amazing – they’re trying new thoughts out, trying new words out, they’re picking up stuff faster than you think, and they have an imagination that just blows my mind.

When it comes to talking to preschoolers about money, your conversations can loosely follow the general guidelines of what the President’s Advisory Council on Financial Capabilities says your preschooler should be learning at this age.

Money conversation topics for preschoolers:

  • Shopping from a list/making a list for the store versus willy-nilly, impulse-shopping.
  • If we want to go on a trip or vacation, then we start saving money for it now.
  • Tell your child a story about something specific you wanted to save up for – either as a child, or as an adult – and how you successfully saved up for it.
  • Explain how you need to spend your money that you work for on needs, before you can spend it on wants. Point out a few “needs” that you spend money on, such as when you turn the lights on, bread/eggs, etc.
  • Share the first store transaction you ever made (or can remember), what it was for, and how you got the money to pay for it.

Important Money Conversations with Children

Kids generally know how to count money, that money is spent on things they want and need, that they want more of it, and that you work to earn money for the household. Your child might know more, or they might know less, but these are the basic money concepts that people their age tend to have.

You now want to have money conversations with your kids that grow on these concepts to take your kid’s financial understanding, interest, and capabilities to the next level.

Money conversation topics for kids include:

  • Together with your child, come up with what percentage of each birthday/Christmas/holiday monetary gift they’ll automatically put directly into savings.
  • Talk your child through the research process you go through to compare prices and products before you buy something.
  • Talk about your first savings account. Who helped you open it? How did you use it?

How to Talk to Your Teenager about Money

How you talk about money to a teenager is going to be quite different from talking about money to kids or to preschoolers.

For one, they understand a lot more at this stage (even more than they may be telling you). For another, they are more socially and outwardly focused at the moment than they have ever been (and will ever be) in their lives.

They are pulling away from you, and clinging to others.

Po Bronson & Ashley Merryman from NurtureShock, say,

“To seek out a parent for help is, from a teen’s perspective, a tacit admission that he’s not mature enough to handle it alone. Having to tell parents about it can be psychologically emasculating, whether the confession is forced out of him or he volunteers it on his own…”

So, how are you supposed to get them to listen to you about anything, let alone a resource (money) that they want total control over?

Here’s a few pointers:

  • Approach them as a mentor, not as a manager (managers are all about supervision and regulations while mentors are all about consulting and advising)
  • Be accepting (parent acceptance opens the door for your advice to come through)
  • Enlist a money tribe

A money tribe? What I mean is, have you ever noticed that teens are more willing to open up to other adults? That, even though they were “tight” with you as a kid, they tend to only show that cute and awesome side of themselves to others at this stage in the game?

While it can be heartbreaking to go through this period (or so I've been told by many other mothers of teenagers), you can at least meet your teen where they're at and try to open up money conversations in a group setting with other adults that they are more apt to listen to.

Gather a group of your adult friends and adult family members, set up a bonfire, and let everyone know the topic of conversation is going to be about money. You can all sit around in a circle of chairs, and take turns with who has the floor to share some of the following:

  • A money mistake you made as a teenager
  • A money mistake you made as an adult
  • What has your biggest “aha” moment been around money? When did it occur, and why do you think it happened then?
  • When was a time that you made a different decision than you thought you would because of money? Did things end up working better, or worse?

Get your teen talking AND listening to adults about money, and just have some fun with it. You might be surprised with the questions they ask, and their own stories they share about their brief money management history.

Your Deck of Money Conversation Starters for Kids

Download your free deck of money conversation starters for kids. These are meant to be really fun, provoke thoughtful (or downright silly) answers, and lighten up the air around money convos in your household.

Psst: Does the idea of your tween bringing up investing and other Stephen-King-scary money questions leave your knees wobbly? Don't be afraid to say that you do not know the answer. Really. It's that simple. Then you can either research something with them together (score on engaging with them in a new activity), or ask a friend of a friend who might know about the subject at hand and be able to talk to them. You got this, Mama Bear!

There are two sets of questions in this free printable: pages 1-6 are the kid questions, and pages 7-12 are the adult questions.

You'll want to cut them all out. Place all the kid questions into one jar, and all the parent questions into another. Take turns choosing from each jar, with either the person choosing the card having to answer it, or each person choosing a card for another family member to answer.

Where to Use these Money Conversation Starters for Kids

You can use these money conversation starters for kids around the dinner table (talk about a fun way to keep the kids engaged at dinner time!), on road trips, or even laminate them and twist a rubber band around the deck to keep in your purse and whip out the next time you + your kids have to wait, like at the doctor's office.

Some of my favorites? Here's a sneak peek.

Kid Examples:

  1. What is one belonging you'd like to keep forever because you think it'll be worth money one day?
  2. Would you be willing to give up all video games for five years if someone paid you $1,000? How about $5,000?
  3. Look to the person to your left. What is one thing you would want to buy them if money was no object?

Parent Examples:

  1. What is one souvenir you regret buying on a vacation because you'd rather have the money back?
  2. You see an ad that details a way to make $10,000 in 5 days, money back guaranteed. Do you purchase the product to show you how to do this (it's $135.99) or move on?
  3. Name something you cannot give up. Now, would you give it up for $50,000?

So, what are you waiting for? Download these today and start cracking the money ice with your kiddos.

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Amanda L. Grossman is a Certified Financial Education Instructor, a 2016 Plutus Foundation Grant Recipient, and founder of Money Prodigy. Amanda's kid money work has been featured on Experian, GoBankingRates, PT Money, CA.gov, Rockstar Finance, the Houston Chronicle, and Colonial Life. Read more here.
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