As a parent, I’ve always felt it was my responsibility to teach my children the fundamentals of finance to ensure they’re well set up for adult life. We know that successfully managing your money starts with the habits that you form early on in life, meaning it’s never too early to start prepping your kiddos. Today, I’ve broken down a roadmap for what you can teach them based on each stage of childhood. Dive in!
Ages 3-7: Build Basic Money Awareness
Since this is early on in their journey, the goal here is simple exposure. Let them make small financial decisions. Using an allowance, birthday, or holiday money they’ve been gifted, when your child has their eye on a new toy or craft, walk through the thought process of a purchase with them:
- What does the item cost?
- How much have they saved so far?
- How much will be left if they buy it?
- Is it worth spending their money on?
This helps teach them the value of a dollar and allows them to build confidence by letting them make the call themselves. It’s also an early, low-stakes lesson in impulse spending—if they blow their savings on a “must-have,” they’ll feel it the next time something else catches their eye.
I also encourage you to discuss prices with your kids during this stage. The grocery store is a go-to spot for this. If you compare brands and point out price differences, you’re helping them to walk through the mindset from the get-go. Building cost awareness is key!
Ages 8-12: Connect Money to Work
At this point, we want to introduce earning and what it looks like to receive money for work. Consider paying small amounts for the completion of tasks that go beyond your kids’ normal household responsibilities. Great examples are:
- Washing the car
- Helping with yard work
- Organizing the garage
While this is an important concept to introduce, it’s also worth reminding your kids that not everything we do for family and friends should come with monetary payment. Helping out of kindness and compassion matters too. Be clear about which specific tasks earn money and which are simply part of being family.
From here, you can also set a savings goal. For example, if there’s something specific that they want to buy (like a bike or a toy), sit down with them to figure out how much it is, how much they need to buy it, and what their savings plan looks like. Working toward a goal over time teaches patience and the early foundations of a strong work ethic, and it makes reaching that goal so much more meaningful.
Ages 13-17: Teach Real-Life Financial Skills
The years from 13 to 17 are crucial for establishing a bit more of a money mindset and tangible foundation for wealth building. One of the most exciting steps you can take here is opening a bank account! Get your teenager involved and show them how banking works: checking balances, making deposits, withdrawing from the account, etc. Involving them in the process gives them the basic knowledge of the system and can enable their confidence in having their own account and being able to see and use their money on their own.
This is also a great age to begin talking with them about investing. Walk your kids through the basics of growing their money—what accounts they can open when they become of age, how they can invest, and more. I’ve broken these down further below:
- How compound growth and interest work
- How the markets function at a high level
- What a Tax-Free Savings Account, Registered Retirement Savings Plan, and First Home Savings Account are, and how each serves a different purpose.
Of course, we want the discussion to feel relatable and exciting rather than stressful and confusing. Let’s get them invested in the concept here—see what I did there?!
Ages 16–18+: Prepare Them for Adulthood
These are the final years under your roof where you can help to get those fundamentals in place. Now, I usually start this a bit earlier, but these ages are great for getting more into the nitty-gritty of a budget. In other words, gaining understanding of income, expenses, and savings/investments.
If they have a part-time job, build a simple budget around what they earn and any home-life expenses they’re responsible for. It reinforces the value of money, personal responsibility, and the real consequences of living beyond your means. Which brings us to a great topic, how credit and debt work (i.e. what a credit score is, the consequences of carrying or ignoring debt, etc.). This can help your kids avoid costly mistakes down the road.
Children who learn that saving creates freedom, investing can grow their money, and spending involves trade-offs are well set up to be financially confident adults. At the core of this is starting these habits early, and I strongly believe this. At the end of the day, teaching these fundamentals is a lasting gift we can give as parents—it’s something they can carry forward forever!
I hope these tips are helpful. If you have questions about how to bring your family into these conversations, or about your own financial plan, I encourage you to reach out to your financial advisor. We’re always here to help guide you through this process, no matter where you’re at.