How to teach your kids to have a healthy relationship with money

On May 3, 2022

Many parents intend to teach their children to have a healthy relationship with money but end up falling short — even though a majority say personal finance lessons are best taught at home.

Some 83% of adults say parents should teach their kids about personal finances, according to a CNBC + Acorns Invest in You survey. Even though they think they should be the ones educating their children about the ins and outs of personal finance, most parents are not, in fact, talking about money with their children.

The same survey found that just15% of parents talk to their kids about money once a week. More than 30% said they never discuss it with their children.

“It’s kind of similar to having the birds and the bees talk with your kids,” said Alex Melkumian, a licensed marriage and family therapist and founder of Financial Psychology Center in Los Angeles. “Money and sex can be intense conversations but they’re really necessary and can be meaningful if done the right way.”

He said parents should understand that they may feel uncomfortable talking about money because it wasn’t something they did at home when they were growing up.

“This is something that they are going to reverse the cycle on, and the earlier they can start the better,” he said.

Start early

Parents can talk about money with their children at an early age — as soon as their kids are in elementary school.

“Children need to learn from a very early age that money is not a scary concept,” said Debra Kaplan, a licensed therapist, author and speaker based in Tucson, Arizona. “And the more they know about it, the more they can feel a kind of mastery over it.”

How parents should communicate about money will vary greatly depending on the age of the child, she said. With young children, parents can include their kids in activities where they budget and spend, such as going grocery shopping.

“We have to give [money] context for a child,” said Kaplan. That means explaining to them in terms they understand what money can be used for — it can be spent on things like food, or toys for kids, or saved for later.

These outings often bring up opportunities to discuss money with children, like if they ask for a certain toy or food item that isn’t in the budget or you weren’t planning on purchasing that week. That’s a time that parents can begin to model healthy behaviors, according to Kaplan.

Say, for example, you are grocery shopping, and your 5-year-old child asks for two different types of cookies.

You can say something like you can’t afford both, or that two types of cookies aren’t in your budget, which your child likely won’t understand.

Instead, Kaplan recommends acknowledging that the family likes buying cookies, but to choose one for this week and leave the other type for next week.

“That begins…