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Teaching kids about money management is incredibly important, yet personal finance is not a topic that's often taught in schools as part of a regular curriculum. Since they're not guaranteed to receive financial education in the classroom, it's important that parents talk to their kids about money at home. Parents don't need to be financial experts to have these conversations and they don't need to have all of the answers. 

Studies show that simple conversations around saving, budgeting, and staying out of debt can greatly help kids establish healthy financial habits as they enter adulthood, setting them up for success as they get their first credit cards and manage income. It's true that kids often inherit financial habits from their parents, as they observe how their parents talk about money and how they spend it. The good news is that parents have great influence teaching their kids to make smart decisions when it comes to money. 

Lack of Formal Financial Education in Schools

While understanding how to manage money is essential for adulthood, many kids aren’t receiving enough formal financial education in school. According to a OnePoll survey conducted for BOK Financial, 29% of parents say their children don’t learn enough about money in the classroom. 

In the U.S., only 29 states require high school students to complete a personal finance course to graduate—and most states offer little to no financial education before high school. Yet, 85% of parents agree that money conversations should begin well before the teenage years, when kids start earning money and opening bank accounts. Since schools often fall short in preparing kids for financial independence, it’s up to parents to bridge the gap and help their children build strong money habits early on.

Kids Learn Money Habits at Home

It turns out the apple doesn’t fall far from the money tree, so to speak. In lieu of formal financial education, kids look to their parents for personal finance lessons. Kids observe their parents' relationship and mindset with money and are likely to adopt the same mentality, whether they see money as a source of stress, or as a tool. Whether parents realize it or not, kids hear the way their parents talk about money and how they spend it. For this reason, it's important for parents to model healthy financial habits to teach their kids positive money skills.

Healthy financial habits come with practice, and for this reason many parents choose to give their kids money to learn how to manage it. Positive money behaviors and expectations among kids are often associated with their parents letting them decide how to save and spend their money. By allowing kids to manage their own funds, the majority will be more comfortable discussing money and are more likely to talk with their parents about money. 

Kids who have money management discussions with parents are less likely to:

• Spend their money as soon as they get it
• Have lied to their parents about what they spent their money on
• Expect their parents to buy them what they want
• Feel ashamed because they have less than other kids
• Less likely to have laon delinquency and home foreclosures in adulthood

Later in life, young adults who discussed money with their parents are more likely to:

• Have a budget
• Have an emergency fund
• Have greater savings
• Have a retirement account
• Have a good credit score

Start Talking to Your Kids About Money

Even though parents play a powerful role in shaping how their kids handle money, many still shy away from the topic. Many parents admit they’re hesitant to talk about finances—often because they don’t want their children to worry. But money conversations don’t have to be stressful or complicated. In fact, everyday moments offer perfect opportunities to start. 

Try involving your kids in budgeting for back-to-school shopping, comparing prices at the grocery store, or visiting a bank or credit union together. These simple experiences can spark meaningful discussions. And here’s the kicker: parents who talk about money with their kids at least once a week are far more likely to raise children who feel confident and capable when it comes to managing money.

Best Time To Teach Kids About Money

If you’re wondering when to start talking to your kids about money, the answer is simple: the earlier, the better. In fact, 64% of parents say they began money conversations when their children were young. Research shows that kids as young as three are already making assisted purchases, and by age six, many are learning to save with piggy banks and allowances. 

Starting early helps kids build a strong foundation for smart financial decisions later in life. One great way to kick things off? Take your child to open a savings account. For example, United Federal Credit Union offers a Youth Savings Account designed to help kids under 21 start saving for their future—making money management feel real and empowering from the start.

Small Conversations, Big Impact

Whether you have your finances in order or are still working on it, kids are always watching and drawing their own conclusions from what they learn from you. Even parents who harbor an extra cautious or fearful approach toward money may also pass down unhealthy money habits, according to experts. But spending some time understanding your financial psychology can be incredibly valuable in helping improve your financial health and can help you teach your children those same skills.