How Much Should You Share With Your Kids About Your Finances? Experts Weigh In
Written by
Nicole Spector
Edited by
Kristen Mae
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Most of us were raised without any formal education in personal finance. This alone can hold us back. But for many of us, it’s worse than that — we didn’t have much of an understanding of what was going on with money in our own homes while we were growing up. Maybe we sensed, or were told, that the money situation at home was “bad” or “good” or “stressful.” But that’s not education — that’s emotion.
Now, as parents, we want our children to have it better than we did. That means equipping them with the right tools to navigate the world of personal finance when they’re older. So what, exactly, should we share with our kids about our finances?
Your Money Values
“The first place my mind goes when thinking about your question is, share your money values,” said Brian Lawrence, partner and financial advisor at North Ridge Wealth Advisors. “Teaching values can start at a young age and last until they leave for college, or whatever the next step might be after high school.”
Consider the everyday — or even once-a-year — things you do with money that reflect your financial values. “The conversations can be as simple as saying, ‘We are a family that pays our bills on time’; ‘Our family doesn’t buy unnecessary things’; or ‘This family saves money so we can buy things that really matter, or go on special trips,'” Lawrence said. “The list is endless. And discussion should be welcome to help children understand ‘Why.'”
How Money Grows
Victor Wang, CEO at Stockpile, pointed out that many of us tell our kids, “Money doesn’t grow on trees,” but stop there. We should go further and show them where and how money does grow.
“Introducing concepts like compound interest and investing can help them understand the value of patience and long-term thinking,” Wang said. “You can start by explaining that when you invest money, it doesn’t just sit there. It can grow over time because the money you earn, through returns or dividends, can help you earn even more. Using simple examples or visual aids, like a chart or an online calculator, can make this concept clear and engaging for kids.”
Wang encouraged taking it a step further by showing your kids how you invest — whether through a retirement account or investing app.
“When kids see that investing is something you do little by little over time — not a one-off thing or some big gamble — they start to see that growing money is about patience and sticking with it,” he said. “Encouraging them to start small, maybe by saving part of their allowance or birthday money, and watching it grow bit by bit can help them feel excited and confident about handling their own money down the road.”
Your Relationship Between Work and Earnings
Kids, especially those too young to get summer jobs, may not clearly connect the dots about how their needs or wants are fulfilled by your income. You shouldn’t hold your hard work over their heads, but you should open a conversation about the concept of earning money by working.
“I’d suggest having a conversation about a bigger treat item that your child wants, noting the cost of it and allowing them to earn it via various chores appropriate to the age of the child,” said Dan Wilderness of The Financial Wilderness. “This also helps teach them responsibility and life skills as well. Just remember to have realistic expectations for the age of the child.”
The Behind the Scenes of Budgeting
Liam Hunt, director of research at Income Insider, recommends starting to explain budget when kids are about 8 or 9 years old, and to do so using concrete, everyday examples, like during grocery shopping.
“For example, you can say, ‘Hey, we have $150 for groceries this week. These organic berries cost $5, but regular ones cost $3. What else could we buy with that extra $2?'” Hunt said. “This teaches opportunity cost without making them feel deprived.”
“Basically, don’t just say, ‘We budget.’ Show them the trade-offs,” he added. “Don’t just say that you’re making sacrifices to afford their soccer camp this summer, but tell them that you’re choosing to spend money on soccer camp instead of eating out as much at restaurants. Demonstrate that financial decisions aren’t about having or not having money, but actually about assigning priorities to your expenses according to what matters.”
The Money Situation When It Comes to College
Outstanding national student loan debt in the U.S. stands at about $1.8 trillion. That makes paying for college one of the most important financial conversations you can have with your teen.
“My son’s father and I were very honest with our college-bound son about the stress we experienced in repaying $100,000-plus in student loan debt over twenty years,” said Patricia Roberts, COO at Gift of College, Inc. “We explained that our experience motivated us to save for his education and we also explained why we felt it was important for him to pursue a school and degree that would not result in student loan debt. This context was extremely helpful for him.”
You should also talk candidly to kids close to the age where they’ll begin applying for college about “the current value of available resources and what future expenses likely will and will not be affordable in terms of the net costs of various institutions,” Roberts said.
Your Charitable Contributions
If you give to charity, involving your kids can help reinforce values and teach financial mindfulness.
“By demonstrating to your kids how to include charitable donations as a consistent part of their budget, they’ll gain the valuable life skill of being thoughtful with their finances,” said Adam Nash, co-founder and CEO at Daffy. “Involving your kids in charitable giving is the best way to instill a habit of giving from an early age.”
Core Income Concepts (But Not Salary Numbers)
We’ve covered a number of things you should share with your kids about your finances, but there are things that you should not get into, including the specifics of your salary.
“Don’t share exact salary figures with your kids,” Hunt said. “The next thing you know, your kid might inadvertently share, ‘Daddy makes $150,000’ at school, possibly creating drama in the classroom.”
Hunt recommends teaching them core income concepts instead, like how many hours you work per week, when you get paid, and what that paycheck has to cover, from housing, food and savings.
“If they’re an older teenager,” Hunt noted, “you can gradually share more details, such as disclosing that your salary puts your family in the middle class, for example, or that you earn enough to cover your needs and some wants, but that you have to make difficult choices about big purchases.”
Be Careful Not To Overload or Stress Kids
It’s important and helpful to be open with your kids about money management. But it’s equally important not to overwhelm them with information or make them anxious about financial security.
“I don’t overload my kids with the specifics of income, bills or financial stress. Kids need to feel safe,” said Alex Shekhtman, CEO and founder at LBC Mortgage. “I don’t want them worrying about interest rates, taxes, or investment losses while they’re still figuring out algebra. Transparency doesn’t mean total disclosure. It means giving them the confidence to make good choices when the time comes.”
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