When Should We Start Talking About Money with Our Kids?

by Elle Martinez, Guest Blogger

Founder/ Podcaster, Simplify & Enjoy

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As parents, one of our responsibilities is to prepare our kids to thrive. Besides teaching them valuable skills, it also includes helping them learn to be financially savvy and thoughtful. 

However, many parents find it overwhelming and don't know where and when to start. But, starting early is essential because studies show that most children make their first assisted purchases at age 3.* So, it's critical that they learn good financial habits from the start.

This graphic is explained below.

Graphic is explained below.

Learn More About Family Conversations About Money


Today I want to share some of the most common questions parents have with teaching their kids about money.

Believe it or not, you can start talking about the foundational lessons about finances when you're kids are around preschool age. The key is tailoring it to their level. 

Initial conversations about money should focus on values over numbers for a few reasons.

  • Builds conversations about what they understand. Our first conversation about budgets with our kids began with snacks. When we shopped for groceries, the girls had a spending limit. They learned a lesson about how to prioritize and some basic addition.
  • Reinforces that money is simply a tool. There's a lot of shame and stigma with finances. I believe part of that is due to how we talk about it. We can teach our kids that money can be used to spend, save, and share.

How Should We Handle Allowances?

Allowances are one of the most common things parents worry about regarding kids and money. However, allowances can be a fantastic teaching tool.

A book I think all parents should read is The Opposite of Spoiled. Ron Lieber delves into crucial topics, including how parents can manage allowances.

When Should We Start Allowances?

Experts suggest starting an allowance around the time they start kindergarten. Then, as their parent, you have a clearer idea of what your child can handle.

Our girls had an allowance before they began school, as soon as they were old enough to ask for goodies.

We kept it simple, paying them 50 cents multiple by their age. It was enough to start teaching, and if they made a mistake and wasted money on a toy they ended up not liking, it was easy for them to recover.

By the way, this is also an excellent time to open a savings account with them. They can track their savings and you have a place to deposit gifts from grandparents and other loved ones.

Should Their Allowance Be Tied to Chores?

This a debate many families have and to be honest, there are pros and cons to each decision.

Some parents feel like chores should reflect a job - you only get paid when the work is done. Others feel like allowances are a teaching tool for budget and finances. Finally, there are parents like us, who want to include both lessons.

The key is to be consistent and clear with your kids about how they work.

For us, the girls have a base allowance they are paid. However, they also have chores they do (like keeping their rooms clean and preparing dinner once a week) because we believe everyone in a family should chip in.

They also have bonus chores where they can earn extra money if they take them on.

Whatever you decide to do, try to have a conversation about it with your kids so everyone is on the same page.

Lead By Example

Your kids can learn so much by your example. When they're young, you can have short conversations about things around them.

For example, if you're going on a family vacation, you can talk to them about how you saved up and planned for it. You can also point out because you'll be spending more than normal eating out during the trip, you are cutting back on some expenses now.

They may seem like small things, but they can get your kids thinking about the value of savings.

Mistakes are Teaching Moments

It may be a struggle for parents to let their kids mess up with finances, but this can be a good thing in the long run.

Mistakes are inevitable, so it would be wise to learn them before leaving home. For example, we may feel bad they blew their money on an impulsive purchase. However, it's better to learn that lesson early than later in the 'real-world' when they may be on the hook for massive debt?

Family Finances Doesn't Have to Be Complicated.

As a Coastal member, you have several resources available, including free workshops on different money topics. You can use them to help your teen learn how to manage their credit, save for big goals, and invest!

4 Fundamental Financial Habits For Families


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1. According to investopedia.com, 2022.

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