Home Family Early Childhood When and How to Teach Your Kids About Money. A Guide to Financial Literacy

When and How to Teach Your Kids About Money. A Guide to Financial Literacy


The Right Time to Talk Dollars and Cents

Financial literacy is as essential as reading and writing, yet many parents hesitate to broach the subject with their kids. But just as you wouldn’t wait until high school to teach your child the alphabet, waiting too long to discuss money matters can have long-term consequences. Experts agree that financial literacy is key to a successful future, affecting critical life events such as landing a job, buying a home, or even getting married.

Start Young

Believe it or not, children as young as three to five are capable of understanding basic money concepts. This is an age where they start making choices and can grasp the idea of value. According to Susan Hirshman, director of wealth management at Schwab Wealth Advisory, the earlier you begin, the better. Kids at this age can learn the difference between ‘want’ and ‘need,’ laying a solid foundation for future financial decisions.

Ages Six to Twelve

By the time your child turns six, they’re starting to get a handle on math and can comprehend concepts like saving and spending. Seth Wunder, chief investment officer at Acorns, points out that many financial habits are formed by age seven. For kids in this age group, discussions can involve understanding the value of money and how choices made with it can have broader consequences.

Navigating the Teen Years. More Money, More Problems?

As kids enter their teenage years, financial education should shift to more complex topics. Eric Landolt, head of family advisory and art & collecting at UBS Global Wealth Management, suggests introducing topics like budget management and the concept of investing. This is also an excellent time to involve them in family-wide financial discussions, such as supporting charitable projects.

What Teens Should Know

Once your kids reach the ages of 16 to 18, they can delve into topics like how the financial system and banks work. Landolt notes that these subjects are also often covered in school, making it an opportune time for reinforcement at home.

Key Takeaways – Consistency is King

According to experts, there are a few golden rules when it comes to educating your children about money. Susan Hirshman believes in the importance of consistency, focus on actions, and continuous conversations. Allow your kids to make small, teachable mistakes, so they can learn valuable lessons. And of course, lead by example—your actions speak louder than words.

The Lifelong Benefit of Financial Literacy

Discussing money with your kids might not be the easiest task, but the benefits far outweigh the awkwardness. By empowering your children with the knowledge they need to manage their finances wisely, you’re not just preparing them for adulthood. You’re equipping them with the tools they’ll use for the rest of their lives.

By beginning these crucial conversations early and revisiting them frequently, you are setting your children on the path to financial confidence and, ultimately, a more secure future.

Written by
Clara Underwood

Clara is a lifestyle writer, outdoors enthusiast, and a mother of two. She writes about everything from weekend family outings in nature to fostering emotional intelligence in children. Clara believes that a balanced family life is the cornerstone of a healthy society.