Talking about money isn’t easy. Talking about money with your kids can be even more challenging. Should allowance be tied to chores? How do you make sure your child isn’t spoiled? How do you deal with college debt? Whether your kids are 4 or 24, it’s never too early—or too late—to help build financial confidence.

By Kathleen Murray Harris
Updated June 21, 2018
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Corey Olsen/Lego Sculpture: David Haliski
Corey Olsen/Lego Sculpture: David Haliski

Preschoolers & Early Elementary Kids (7 and Under)

The foundation of money habits is formed very early, as young as age 5, according to research from the University of Michigan in Ann Arbor. But don’t let that send you into a panic; just start somewhere. “Learning financial skills is like learning to tie your shoes or play the clarinet—it takes practice,” says Joline Godfrey, author of Raising Financially Fit Kids.

Communicate about money.
The easiest thing to do? Take the taboo out of money conversations and talk about it around your kids—but not in an “I’m so stressed about bills” way. Rather, share your excitement about a bargain or the fact that you’ve saved enough for a vacation. For kids ages 4 to 7, Godfrey says to focus on using money terms (“save,” “share,” “choose”) and phrases about financial values (“Save for a rainy day,” “Share with others”—and “Carpe diem” if you have funds set aside).

Involve them in your shopping.
When you say, “Wow, this is on sale for $3!” it shows your child that you recognize the price, see the value, and are making a decision about whether to buy it, says Erica Sandberg, a consumer finance expert and the advice columnist for CreditCards.com. At checkout, have them buy something: Hand them cash to use (it’s more tangible than credit) and get the change back. By talking to the person behind the counter and exchanging money—even if it’s not their own—they’ll start understanding that things cost money and becoming aware of personal responsibility for purchases.

Open a savings account.
Picking out a special piggy bank can build excitement about saving, says Jeannine Glista, cocreator and executive producer of Biz Kid$, a TV series that teaches kids about money and business. “Saving money is fun for kids to do—encourage that,” she says. When they receive a larger amount of money, take them to the bank to deposit it into a savings account. You could even deposit the same amount into your own account to show them you’re saving along with them.

Play games.
Simple math games, like those in the app series by Duck Duck Moose (free; Android, iOS), help younger kids get comfortable with numbers. Biz Kid$, the educational initiative associated with the TV series, offers several interactive games on its site; Bringing Home the Bacon helps kids identify wants and needs, says Glista. Or let them play with a calculator. Have them add up the price of everything they want in a catalog or at the grocery store. Seeing the total will help them realize how much they need to save for big items.

Corey Olsen/Lego Sculpture: David Haliski

Older Elementary Kids & Tweens (8–12)

Children can now begin earning money, which is empowering, says Glista. They’ll start to develop money personalities—even at this age, there are spenders and savers.

Brainstorm ways to earn.
“Kids don’t really start paying attention to how to manage money until they’re making it themselves,” says Glista. Encourage them to think about their passions or talents and how they can translate them into a business. If your child loves dogs, can she walk your neighbors’? If she likes crafts, can she make and sell slime? Have them create a business plan by researching how much to charge. If it’s a service, they can look at local flyers or ask neighbors what they’d pay for a dog walker or lawn mower. If it’s a product, help them add up the cost of the supplies and calculate what retail price will earn a profit.

Talk about spending choices.
Yes, it is fun to see those dollar bills pile up, but what are they going to do with them? Buy a new video game? Splurge on candy? Discuss whether it’s a good idea to spend all the money on, say, chocolate—but without criticism. At this age, says Godfrey, “the positive reinforcement of good choices is more important than the punishment of bad ones.” You can also begin to teach the concept of indulgence versus need, says Sandberg: “If you’re at the drugstore and your son asks to buy a toy, and it wasn’t your intention to buy it, say, 'OK, but I’m going to take that money from your savings.' That’s a powerful thing.”

Be positive about your job.
There are days when you just don’t want to go to work—or your kids complain that you have to go to the office again. As natural as it is to gripe, make the concept of a job exciting. You want kids to feel enthusiastic (not greedy) about the idea of making money, says Glista. You’ll create guilt-free associations with work and what it allows you to do.

Model philanthropic behavior.
The next time your local zoo or public library hosts a benefit, take your kids and have them see you write a check. “Kids will copy what they grow up watching,” says Godfrey. You can give your children more control over their money decisions when they’re this age. Let them choose a charity and an amount they’ll donate to that organization on a monthly or annual basis. It could be $1 or $10—“It’s more important that your child gains self-confidence and a realization that they’re doing this themselves,” says Godfrey.

Teens & College-Bound Kids (13+)

This is an appropriate stage to begin involving your child in your family’s financial situation, especially once college becomes a closer reality. At the dinner table, talk about credit scores and what it takes to apply for financial aid. Education is power.

Track dollars.
There are several budget, saving, and investing apps that let kids clearly see where their money goes, says James Nichols, senior vice president of Voya Financial's Customer Solutions Group. His pick: Current ($36 a year; iOS and Android). The app, which is synced with a debit card, features spending, saving, and giving “wallets.” Parents can set up notifications and make direct deposits as well. Or have kids keep a record of every penny they spend over a period of time. “Then evaluate the information together so they see where their money goes,” says Godfrey. As for credit cards, experts say teens shouldn’t get one until they have a regular source of income and can make payments. “Otherwise, the risk is too high for not being able to pay it off on a timely basis,” says Glista.

Play “What If?”
Discuss tricky money situations and how to handle them. For example, ask: Who pays on dates? How do you decide? What if your date’s family has more money than ours? Or vice versa? “This begins to be an issue early—and in high school it is one of the last taboo topics for families,” says Godfrey. While there is no one right answer, by sharing your thoughts, you’ll better prepare your kids for the situation.

Introduce them to investing.
Sites like Yahoo Finance let you create a mock portfolio. Help your child choose a few stocks and watch the ticker go up and down. They’ll see how the stocks perform over time and begin to understand the basics and volatility of the market, says Nichols. Encourage them to think of investing as a subset of saving.

Discuss how you’re going to pay for college.
Kids at this age are about to leap into full independence, so empower them to take charge of financial tasks. They should manage college applications and fill out their own Free Application for Federal Student Aid (FAFSA), says Godfrey. If your family doesn’t have enough resources to cover college, involve them in your problem-solving, says Glista. Consider bringing your child to a meeting with your financial planner. “Kids aren’t always aware of the financial impact college has on their parents; having a professional in the room can provide objectivity and take the emotion out of it,” says Nichols. Discuss how much you’ll need in loans and how that will translate into monthly payments. And before you take out a loan, have a repayment plan. Will your child be responsible? Will you split the bills? “No one wants to graduate and be faced with huge sticker shock,” says Nichols.