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How To Teach Kids About Money

By Lisa Manzolillo, CFP®, CDFA™

If you’re like most parents, you have a laundry list of things you want to teach your child so they grow up to be a successful adult who contributes to society. From a young age, you model and instruct them in how to share, what respect looks like, how to handle responsibility, and how to prioritize. As a society, we are excelling in some areas of parenting, but falling behind in others. In a recent National Financial Capabilities Study, only 24% of Millennials (age 23-35) were able to answer the first three financial literacy questions correctly, and a mere 8% answered them all correctly. (1)

Just giving your kids a piggy bank is not enough. Do you have a plan for how you are going to teach your kids about budgeting, saving, or building credit? It’s easier to start when they are young than to play catch-up when they are teenagers. Here are some strategies to consider that will empower your children to make better financial decisions as they move through life.

Practice What You Preach

Anyone who has children knows that more is caught than taught. If you want your kids to grasp the importance of handling money wisely, you need to let them watch you make financial decisions and model what you want them to learn.

A recent T Rowe Price study found that eight out of ten parents feel that they aren’t setting a good financial example for their kids. If you spend money recklessly without a clear purpose, your kids will see that. If you rely on credit cards to cover expenses or argue with your spouse about finances, they may accept that behavior as the norm. Your actions set a precedent, so be intentional about how you model money management to your kids and let their watchful eyes be a motivator for you to change the negative financial habits you may have picked up.

Start The Conversation

Sometimes a silent model isn’t quite enough since many areas of personal finance aren’t visible. That is why it is critical to talk to your kids about finances. Unfortunately, talking about money is a long-standing cultural taboo. A 2013 study found that 63% of Americans would rather share their body weight with co-workers than their bank account balance. (2) Often this reluctance to discuss financial matters spills over into the home as well.

Forty-nine percent of the parents in the 2017 T Rowe Price study said they rarely or never discuss family finances with their children and 69% of parents experience at least some reluctance to having such a discussion. (3) Many parents even say they would rather discuss drugs or sex with their kids than money. (4)

But how are kids going to learn about money if you avoid talking to them about it? Most parents don’t expect their kids to understand the dangers of drugs just because they have never seen their parents use any. Some things require more in-depth discussion and openness, and finances are one of them. And if you set the precedent of being open about finances when they are young, hopefully they will still come to you for advice or assistance when they get older.

Let Them Try

For financial understanding to truly sink in, you need to get your kids involved. Learning theory and research have consistently shown that the more active a learning experience is, the greater the learning gains and retention. (5) Most people have to do something to really learn it.

How does this work with kids? If you do a simple online search, you will find countless creative ideas for every age level, such as letting them divide their allowance into different categories, set short-term and long-term goals, and helping them understand what things are worth.

Practically, give your 5-year-old some money to buy something at the store so they learn the value of different items and realize that in order to obtain something (a toy), they have to exchange it with something else (money). Try letting your 10-year-old figure out the cost of the new video game he wants, plus tax, and help him save up his allowance for it. Let your teenager buy her back-to-school clothes on her own with a set amount of money. Don’t be afraid to let them make mistakes either. Sometimes learning the hard way is the best way to grow, and it’s better for them to learn those lessons when they are young and the consequences aren’t as severe.

Imparting financial wisdom to your kids is a challenging process that takes years. So, if you don’t feel like you’re doing an adequate job of teaching your kids about money, you’re not alone. Even if you are doing a good job, you probably agree with the 77% of the T Rowe Price survey parents who said that they wished there were more resources available to help them teach their kids about financial matters.

Here at Simon Quick Advisors, we believe that every child can learn critical financial lessons at a young age that will set them up for future success. We want to provide you with the tools to equip you as you start your kids off on their financial journey. To set up a meeting, call us at 973-525-1000 or email Info@simonquickadvisors.com. Together we can make sure that this next generation enters adulthood with the knowledge necessary to build a secure financial foundation for their bright futures.

About Lisa Manzolillo 

Ms. Manzolillo joined Simon Quick in 2018 with over 13 years of experience in wealth management and investing. As a Client Advisor based in Morristown, NJ, she works with clients to identify and implement custom-tailored investment management and financial planning strategies designed to help each client achieve their unique financial goals and objectives. Ms. Manzolillo has experience working in all areas of financial planning, including retirement planning, estate planning, tax planning and risk management. Ms. Manzolillo graduated summa cum laude from University of Rhode Island with a BS in Accounting and earned an MBA with a finance concentration from Fordham University. She completed her Financial Planning Certificate Program at Pace University and became a CERTIFIED FINACIAL PLANNER™ practitioner in January 2008. In 2017, Ms. Manzolillo became a Certified Divorce Financial Analyst (CDFA). To learn more about Lisa visit her LinkedIn.


  1. http://gflec.org/wp-content/uploads/2015/01/a738b9_b453bb8368e248f1bc546bb257ad0d2e.pdf
  2. http://www.countryfinancialsecurityblog.com/cfsi-april-2013/
  3. http://www.moneyconfidentkids.com/content/dam/money-confident-kids/PDFs/PKM-Surveys/2017_PKM_Results.pdf
  4. http://www.dailyfinance.com/2009/06/11/parents-would-rather-talk-with-their-kids-about-sex-than-money/
  5. http://www.joe.org/joe/1994august/a6.php


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