As parents face increasing costs and an overall cost more tense economic climatemore of them are using these challenges as an opportunity to have frank discussions with their children about money, according to a recent survey.
Honest conversations – including saying “no” to your children when they ask you to buy something and explaining why – can give these children a first foundation of financial literacy that can benefit them later in life, says Brad Klontzfinancial psychologist, author and associate professor of economics at Creighton University.
In a survey of 2,000 U.S. parents released March 31 by financial software company Intuit, nearly two-thirds (64%) of parents raising children under 18 said recent financial challenges have forced them to be more transparent with their children about how they manage their finances. Sixty-six percent of respondents said they say “no” more often to purchase requests while explaining their reasoning to their children.
Children don’t always learn much about money at school: since March 2026, 39 US states make successful completion of a personal finance course a requirement for high school graduation, compared to just 12 states 2022according to the Council for Economic Education.
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However, children can begin to form permanent financial habits as early as age 5, research shows. And children who learn financial knowledge early are more likely to establish healthy relationships with money that can help improve their financial and overall well-being as adults, a study suggests. Study 2022 by researchers at Brigham Young University.
You might explain to a young child that an expensive video game console isn’t within your family’s budget, or explain to your teenager how you set aside funds for their college education. When parents talk to their kids about money, “those kids end up in a much better financial situation later in life, instead of having to learn it the hard way,” Klontz says.
Putting an end to your child’s financial questions is a ‘big mistake’Many parents find financial discussions with their children taboo, especially when it comes to their own family’s financial situation and spending habits. studies show. Some parents are ashamed of the state of their own financial literacy, and anxiety about money Being tight can cause parents to avoid discussing the topic, Klontz says.
But avoidance is a “big mistake” when it comes to discussing money with your kids, Klontz says: Never stop to your child’s questions on the subject, even if he or she is requesting a purchase that is not within your family’s financial reach at the moment. Saying “no” to your child’s latest spending request is a great opportunity to follow through with thoughtful and informative reasoning for this decision, he adds.
“You don’t want to convey to your children that this is a stressful, taboo subject that we don’t talk about,” says Klontz. Such an approach can harm children’s long-term financial literacy, he says, especially if they grow into adults who don’t talk about, or even think about, their own budgeting plans.
Explain to your children what your family chooses to spend money on and why, and what you do with the money you don’t spend — like investing or saving for future big or fun purchases, Klontz recommends. “Sit down and say, ‘Hey, we want a new TV, or we have this other financial goal, so… we’re going to set aside X amount of money for each paycheck,'” he says.
You can pass on your values and financial goals to your children while showing the specific path you’re taking to achieve them, says Klontz. Otherwise, “you could be saving in the background, but they never saw it. You never got them to save for anything. That’s a huge mistake we make as parents.”
Offer practical lessons, don’t share too muchMore than half of parents in the Intuit survey said they take their children grocery shopping to give them first-hand insight into current household expenses, and 38% said they talk to their children about regular expenses like rent, mortgage or utility payments. These hands-on lessons help kids think about prices and how much you save for future purchases, personal finance experts say.
“When you’re walking through a store and your child wants something, pick it up [and] show them the price,” Alexa von Tobel, founder and managing partner of venture fund Inspired Capital, told CNBC Make It in February 2024. “‘It costs $29. Mom doesn’t have the $29 for it today, but we can think about saving it for your birthday.'”
Klontz offers a “caveat” to the transparency strategy: Design your conversations to be age-appropriate and not too stressful. Children of elementary school age can be expected to understand basic financial concepts regarding the value of money and the concept of factoring cost into what you buy. say family heritage experts. Middle school students might be better prepared to discuss complex concepts like budgeting and long-term saving.
Just be careful: Scaring or unnecessarily stressing your children can cause them to develop unhealthy relationships with money, says Klontz. If money is tighter than usual, explain in concrete terms why your family might cut back on some expenses in the meantime, while reiterating that everything will be fine for them and the family, he advises.
“You may be passing on some of that fear [and] anxiety, and that manifests itself in very detrimental ways later in life,” Klontz says. If you lie to them, you may face another problem, he notes: “Kids have very good bullshit detectors. I think it’s good to say, “Look, this is stressful, and we don’t know exactly what’s going on. But trust me…we have this.’”
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