Which Money Topics Parents Discuss With Children — and Which They Should Talk About More

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Too many American kids leave high school and enter the world as legal adults without understanding even the most basic fundamentals of debt, credit, interest, saving and investing. Too many schools don’t teach personal finance, so it’s up to parents to raise financially literate children — and in the modern world, yelling that money doesn’t grow on trees just won’t cut it.

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Although the nature of the discussion will vary by family, the best time to begin having it is universal.

“It’s never too soon to start teaching your children about financial responsibilities,” said Matt Gromada, managing director and head of Youth, Family and Starter Banking at Chase Bank. “Teaching kids about money at a young age will help build good financial habits and better prepare them for a stronger financial future.”

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Even so, a new GOBankingRates survey of more than 1,000 adults found that nearly 1 in 4 parents don’t talk to their kids about money at all. That’s a recipe for failure — if they don’t learn about money from home as kids, they’ll be doomed to learn from their mistakes as adults.

Which Money Lessons Are Parents Teaching Their Kids?

The study found that the 75% of parents who do discuss money with their kids tend to gravitate toward specific financial subjects. More than half talk to their kids about the importance of saving, more than one-third discuss budgeting and smart spending and about one-quarter talk about investing, taxes and responsible credit card use.

According to the experts, those are all excellent places to start.

“As parents, it’s important to discuss financial topics such as budgeting habits and saving money with our children,” said Carter Seuthe, CEO of Credit Summit. “Topics like the importance of having an emergency fund, creating a spending plan and credit management are all great starting points. Teaching children about making smart choices early on can create better habits for life.”

So, how can parents turn topics into teachable moments?

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Gromada, who specializes in juvenile financial education, offered tips on how parents can teach their children money lessons that will stick with them for life.

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Money Management 101: Get Hands-On With a Joint Account

Kids learn by doing, so one of the best ways to teach them about money management is to let them manage their money under your watchful eye.

“One of the easiest ways parents can teach their kids about finances from an early age is by opening a joint bank account to help them learn how to manage their money firsthand,” Gromada said. “An account that is accessible by both parents and children offers several benefits. First, it opens the door for important conversations about the basics of finances, from spending and saving to explaining interest and how it accrues. Second, it gives children a sense of independence and freedom, providing opportunities for real-life experiences and learning. Lastly, it gives parents a sense of security, as it allows them to oversee spending and saving decisions.”

Gromada’s own institution offers Chase First for kids 6 and up and Chase High School Checking for older youths.

Start With the Building Blocks: Money Is the Same in All Its Forms

While the money lessons you learned and hope to pass on never change, the physical form that money takes has evolved — adjust your discussion accordingly. 

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“We’ve come a long way from the piggy banks of our youth, or when cash was stuffed in a sock drawer,” Gromada said. “Today’s kids are living in a digital world and their concept of money may be a bit abstract. Digital transactions will become the norm for the next generation of kids, and digital money is more challenging to conceptualize than tangible dollars and cents. It’s important for kids to learn the concept of money, where it comes from, and that they have more money when they earn and less when they spend. But before children can learn how to save money, they need to have money to save. Offer your child activities, like a chore list they can complete, to earn an allowance. Teaching your child how to save the money they earn is a fundamental skill that will benefit them as they grow older.”

The 2 Options of Spending It Now or Saving It for Later

Once your kids understand the concept of money as a purchasing medium earned through labor, the most important thing to teach is that you can only do two things with it — purchase things by spending it now or purchase choices by saving it for later.

“Saving for a rainy day is an essential financial step to learn,” Gromada said. “It can provide peace of mind, help with life’s unexpected expenses and prepare for bigger financial purchases in the future. Once your child understands the importance of saving the money they earn, they can begin to build savings habits that will last a lifetime.”

Gromada recommends setting up automatic transfers on your joint bank account to get your kids hooked on the good feeling of watching their savings grow from a young age.

“Help your child set up an automatic payment of as little as $1 per week, and they’ll get a live view of how their money grows over time.”

Be Real About What It Costs To Buy the Things They Love

Now that they understand that every dollar spent is one that can’t be saved, give your kids real-life examples about the importance of saving and budgeting by being honest about what their lives cost.

“Summer is almost here, which means it’s time for vacations, summer camps, outings with friends and more,” Gromada said. “Parents know that the cost of these activities can quickly add up, but your child is likely unaware of all the expenses that come with a summer of fun. As you take your child to activities this summer, take the opportunity to explain the cost of these activities. You can offer them a portion of their allowance to allocate on an outing, creating an opportunity to teach your child about smart spending strategies.”

It’s Not a Talk, It’s Ongoing Education: Dig In for the Long Haul

It’s important to start teaching the fundamentals at an early age, but the key word there is “start” — financial literacy can only be taught consistently over time.

“Regularly checking in with your child to discuss their financial activity — whether it be what or where they’re spending, how much they’re earning, or their savings goals — provides opportunities to keep money as part of your family conversations,” Gromada said. “It may also be an opportunity for a parent to talk about any financial mistakes they may have made, what the impact was and what it taught them. Conversations are crucial, so continuous check-ins are helpful for both parents and children.”

More From GOBankingRates

Methodology: GOBankingRates surveyed 1,005 Americans aged 18 and older from across the country on between January 16 and 18, 2023, asking twenty different questions: (1) Do you currently have any form of an emergency fund?; (2) How much do you currently have put away for an emergency fund?; (3) If you faced an emergency (medical, housing, etc.) how would you have to pay for it?; (4) How much do you currently have saved for retirement?; (5) Do you have any of the following debt? (Select all that apply); (6) How much debt (student loans, medical, auto/personal loan, credit card, etc.) do you currently have? (NOT including mortgage); (7) If you have a significant other, how much do you argue about money concerns?; (8) Which money topics do you discuss with your children? (Select all that apply); (9) How often do you discuss personal finance issues with your family and/or friends?; (10)What are the chances, in an average month, of you and your family running out of money before you are paid next?; (11) What worries you most when it comes to your personal finances?; (12) Compared to pre-COVID (before March 2020) are you more or less confident in your personal finances?; (13) If you received an unexpected bonus of $5,000, what’s the first thing you would do with it?; (14) If you won the lottery ($100 million), which of the following would you do with the winnings? (Select all that apply); (15) Would you rather…ask a family or friend to borrow money or max out a credit card?; (16) What would you like to learn more about in order to improve your personal finances?; (17) Do you consider yourself a spender or a saver?; (18) Which categories do you believe you overspend on? (Select all that apply); (19) How much do you spend on self care monthly?; and (20) What is your top financial priority?. GOBankingRates used PureSpectrum’s survey platform to conduct the poll.

Make Your Money Work for You

About the Author

Andrew Lisa has been writing professionally since 2001. An award-winning writer, Andrew was formerly one of the youngest nationally distributed columnists for the largest newspaper syndicate in the country, the Gannett News Service. He worked as the business section editor for amNewYork, the most widely distributed newspaper in Manhattan, and worked as a copy editor for TheStreet.com, a financial publication in the heart of Wall Street's investment community in New York City.
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