Talking about Money with Kids

By Treasurer David McRae

Financial Resources for Parents & Kids

Throughout April, as part of Financial Education Month, I have been writing about ways families can improve their financial literacy and savings skills. What we haven’t talked about yet is how to discuss all this with our kids.

Nearly 7 in 10 parents report that they are reluctant to talk about money with their children. And as a dad, I get it. It can be awkward to discuss about how much or how little you have with kids who might not understand the intricacies of a family budget – or the value of a dollar. But it’s important to do nonetheless.

Katherine Martinelli with the Child Mind Institute writes: “Teaching children to be financially responsible early on will help them cope with challenges like setting limits, planning a budget and resisting impulse buys.”

So, how young is too young to start these conversations? A University of Wisconsin-Madison study found that kids can begin to understand basic financial concepts by age three. So, it’s never really too early.

Financial guru Dave Ramsey does, however, share a few tips to start the conversation that I wanted to share with you today.

First, he says, “start slow.” You probably don’t need to talk with your 8-year-old about the differences between a SEP IRA and 401(k). But you could have them create a budget based off their allowance. Consider working with your child to put a portion of their allowance directly into a savings account, give a portion to a charity or church, and reserve a portion for short-term spending.

Then, Ramsey advises, be honest. He writes: “If you regret going into debt or not saving more for college, tell your kids…. [They] can handle it—really.”

Next, Ramsey gives any parents nervous about disclosing their salary an out. He encourages you to talk values (such as budgeting and saving), not figures. The truth is, regardless of whether you’re talking about a $40,000-a-year salary or a $10-a-week allowance, these broad concepts apply.

Fourth, he encourages families to set goals together. Whether it’s a vacation or a car, let kids know what you’re saving for and allow them to participate in the process.

Finally, learn about money together. I’m excited to share the State Treasury has put together a series of tools to help you do that. Please visit to find a curated a series of games, activities, and financial tools that every member of the family can use. If nothing else, we hope they help you start the conversation in your own home.