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How to Talk to Kids About Finances

You can’t quite articulate just how much your parents can influence you, for better or worse, until you’re older.

I was lucky enough to grow up with a great financial education from my parents, who were both very frugal and open about money. In fact, their honesty about our finances is a major reason why I am writing this article today.

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There are plenty of hard conversations we are going to have with our kids one day, and I’ll spare you the details about most of them. What’s important is knowing the responsibility we have as parents (or future parents) to steer the conversation and control the narrative. This includes the narrative about money, which could be one of the most important things you could ever provide for your kids.

The proof can be found in the data. Personal Capital recently surveyed 1,000 adults about their financial upbringing, and 75.9% of the respondents said that their parents influenced their financial habits, and nearly 2 in 3 of the respondents in bad financial standing said it was a result of these parental habits. Nearly half of the participants have experienced stress as a result of their parents’ financial choices.

The data collected for the survey also shows that conversations revolving around money didn’t happen until the children were in adulthood.

All this information suggests we could do better at talking to adolescents about money. In an attempt to learn how, I talked with Kelsey Smith (BSW, M.Ed, Ed.S) to better understand how to steer the conversation about financial panic to your kids.

Here’s what she had to say:

Children Under Age 7

For children under seven years of age, keep the conversation light and only tell them what is considered necessary. Younger children have a tendency to take things verbatim, so it is likely they are still unable to fully understand complex topics like the stock market or compound interest.

An appropriate topic to discuss could include job loss in the family, and it should be noted to make sure to end the conversation on a hopeful note. For example, “Takenya, Dad lost his job, that means instead of going to work he will be looking for a new job. There is no reason to get upset or to worry. (Mom/Dad/Caregivers) will make sure you are safe. Do you have any questions?”

Answer their questions in child terms without giving too much detail, and ensure you keep the stress, talk, and anxiety away from any discussions where children of this age can hear.

Children Between Ages 8-12

At this age, children could start to receive an appropriate financial education that is free from any ties to the family’s current financial standing in a crisis. Instead of explaining the stock market, show them an example by providing 100 dollars to invest (either real or through an app) and have them explore what this means.

Show them simulations of what happens to 100 dollars invested at a high (a few months ago) versus a low (now). Discuss smart money moves such as the importance of not trying to time the market, not panic selling, etc. If you have the financial means, this can be a great time to start a family economy and help children understand investments, saving for college, the difference between stocks, bonds, mutual funds etc.

It may be inappropriate and anxiety-inducing for children at this age to get too overly involved in the family’s financial situation. They need to feel secure in their home by knowing that the finances are their parents’ responsibility. Just like above, job loss should be handled age appropriately and not concern the child too much. Using terms like “we are poor now” can send the wrong message (and are problematic).

When it comes to shopping and money being tight, you can say something like, “Oh no, that is not how we can spend our money right now. We are trying to save as much as possible because of mom/dad/caregivers’ unemployment. Why don’t you write down what you want and we can think about what to save?”

Even if a job is not at stake, trying economic times are a great way to show children how to double down on savings and doing so without fear. According to the recent survey from Personal Capital, it was found that approximately 71.3% of the respondents who are in “good financial standing” had conversations with their parents about financial crises or recessions when they were children.

Children Who Are Ages 13+

At this age, children should be encouraged to dig deeper into economics with their own finances (from chores, tutoring, babysitting, jobs etc). Parents can have monthly finance meetings where you show them how to budget, invest, and look at their finances in light of the current world’s situation.

Whether you have had a positive financial influence growing up or a negative one, you can have the power to change the narrative. Children are our future, and the responsibility is on us to ensure that they receive the best financial education and support possible.

Getting Your Family on the Same Page About Money

Free online money tools like Personal Capital that allow you to track your finances in one place, and visualize your investments, cash flow, and retirement plan can be great to facilitate conversations about money with your family. Especially for children who are visual learners, tools like the Personal Capital dashboard can not only be great tools to help you monitor and optimize your finances, but can also be great vehicles for helping to teach your kids about the more nuanced aspects of personal finance.

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*Personal Capital compensates Tori Dunlap (“Author”) for providing the content contained in this blog post. Additionally, in a separate referral arrangement between Author and Personal Capital Corporation (“PCC”), Author is paid $70 and $150 for each person who uses Author’s webpage ( to register with Personal Capital and links at least $100,000 in investable assets to Personal Capital’s Free Financial Dashboard. As a result of these arrangements, Author may financially benefit from referring potential clients to Personal Capital and/or be incentivized to present blog content that is favorable to PCC. No fees or other amounts will be charged to investors by Author or Personal Capital as a result of the Referral Arrangement. Investors that are referred to PCC and subsequently subscribe for investment advisory services provided by PCC’s affiliated adviser, Personal Capital Advisors Corporation (“PCAC”) will not pay increased management fees or other similar compensation to Author, PCC or PCAC as a result of this arrangement. Additional information about PCAC is contained in Form ADV Part 2A available here.

The content contained in this blog post is intended for general informational purposes only and is not meant to constitute legal, tax, accounting or investment advice. You should consult a qualified legal or tax professional regarding your specific situation. Keep in mind that investing involves risk. The value of your investment will fluctuate over time and you may gain or lose money.

Any reference to the advisory services refers to Personal Capital Advisors Corporation, a subsidiary of Personal Capital. Personal Capital Advisors Corporation is an investment adviser registered with the Securities and Exchange Commission (SEC). Registration does not imply a certain level of skill or training nor does it imply endorsement by the SEC.

Tori Dunlap is a millennial money and career expert. After saving $100,000 at age 25, Tori founded Her First $100K to fight financial inequality by giving women actionable resources to better their money. A Plutus award winner, her work has been featured on Good Morning America, New York Magazine, Forbes, CNBC, and more. An honors graduate of the University of Portland, Tori currently lives in Seattle, where she enjoys eating fried chicken, going to barre classes, and attempting to naturally work John Mulaney bits into conversation.
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