3 Money Lessons Parents Should Teach Their Kids Now So They Don’t Go Into Debt Later
Written by
Laura Bogart
Edited by
Kristen Mae
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You have a lot of goals for your kids. You want them to follow their passions — without compromising their financial stability. You want them to find community and be good people. Most likely, going into debt is not among those goals. You would hate for your children to experience the anxiety and upheaval that comes with debt — especially high-interest debt.
So, it’s time to start talking about money with your kids. Even if they’re very young, the lessons you teach them about money can stick with them well into the future, empowering them to make smart decisions and stay debt-free. To help determine which money lessons parents should teach ASAP, GOBankingRates spoke with Angie Welsh, founder and president of My Annuity Agents.
Delayed Gratification Is a Virtue
Think of it this way: You’d rather be the voice in your kid’s head than yet another ad from the TikTok Shop. To become the angel on their shoulder urging financial caution, Welsh suggests starting the conversation early and in age-appropriate ways — no, she’s not suggesting you teach a 2-year-old about investing. Your first topic should be the value of delayed gratification.
“The most important skill kids should learn is that money is a tool, and waiting to use it can make that tool even more powerful,” she said. “This simple concept can be taught to children at a young age.”
Welsh notes that even high-earning adults can struggle with money if they never learn that they don’t have to buy everything they want, when they want it. Understanding that money exists to help achieve certain life goals — and that those goals may require patience — is essential to long-term success.
Don’t Be Afraid of Money
When kids are conditioned to see money as a force that can damage their lives, they’re more likely to shut down and avoid learning how to manage it — often leading them deeper into debt.
“The second most important skill that kids should learn is that we should not fear or obsess over money; we should respect it,” she said. “Fear and obsession lead to bad money decisions, while respect leads to disciplined ones.”
Welsh adds that while keeping mum about money is probably the most common mistake parents make, using negative or fear-inducing language is a close second. Phrases like “we can’t afford that” can create negative associations with finances. Instead, she suggests parents say things like, “We’re choosing to save our money for other things.”
“This simple switch teaches children that we have control over our money instead of creating financial insecurity,” she said. “Teach them that you’re choosing not to buy something because you value your future options.”
There’s a Clear Difference Between Needs and Wants
All too often, people take on unnecessary debt by overspending impulsively because they haven’t fully internalized the difference between a need and a want. Welsh says parents should introduce this lesson every time a child asks for a new toy or treat. Ask whether they need it or simply want it very badly.
“Start this practice at a young age and let them think it through,” she said. “This doesn’t mean you never buy them what they want, but you should have conversations about needs and wants early on.”
She also advises asking kids how much they want something. Encourage them to examine their thought processes and decide when it’s OK to make a purchase and when it might be wiser to wait. These habits can help kids develop a healthier relationship with money later in life — and, ideally, avoid unnecessary debt.
The Bottom Line
You want the best for your kids — and that includes a life not weighed down by debt. Starting with simple money lessons about patience, discretion and avoiding fear-based decisions can make all the difference.
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