How To Discuss Money With Children

By now, many of you have probably seen the viral videos of a man asking his young child questions about money. I posted the video below that actually inspired this blog post.

I was amazed at how much this kid knew. It sparked something in me to start including Caleb & Joshua in more money conversations around the house. As you know I have been on a financial journey for a couple of years no. I mentioned that I didn’t have money conversations growing up, check out that post here. I reached out to Financial Guru Krystal of The Cash Compass, once again for advice on this topic. She’s been featured on this blog before here if you want to catch up. Let’s get into it.

How To Discuss Money With Children

Caleb is 10 and Joshua will be 9 on Monday. The boys know how much my salary is, I am open with them about that. When they ask me for things, I always explain what bills are due and why I just don’t buy them anything and everything they want. Krystal says the moment a child can understand the value behind the numbers (I.e. when they can figure out that 1 dollar is less than 100 dollars) then you can start to teach kids about money. I would say as early as three or four is when a child can understand that difference. The lessons will vary of course depending on the age they are but the earlier the better! I am already teaching them how to budget the money they receive on their birthday, so they have some concept of saving, and not spending all you have at once. Also, having them involved in some of the money decisions will get them exposed to the basics of money. Krystal recommends taking them food shopping with you and explain what the budget is and have them get their calculator and add up all the food to make sure you are in line with your budget. If the amount is over budget, then have them figure out which items aren’t a necessity and can go back. These ideas help them feel included, give them a sense of independence, and teach money lessons and other crucial skills in an age-appropriate way.    

Krystal drove the point home that we should incorporate money into everyday life situations. Her daughter Kamryn is about to be three and the way they will start money lessons will be whenever she wants a new toy she has to “sell” some of her old toys (but really they will give it to charity). So they will put a price on each toy and once Kamryn “sells” enough of her toys, then they can buy the new toy. This can work for older kids too and they can actually sell things they no longer use around the house. If your child asks you for money, consider asking them to come up with a plan for how they will earn the money and have them negotiate the pay. For example, they can offer to prepare a meal or mow the lawn and negotiate a price with you on how much that service is worth. Not only does this teach kids about earning money, but It also develops their entrepreneurial mind as they have to look for and fulfill a need in the house as well as “sell” that service which is such an important skill because sales are EVERYWHERE in life.

How To Discuss Money With Children

The boys have a savings account that is under my name along with my personal accounts. This is where I deposit all the checks/money they receive from family and friends, I also show them the balance periodically. The Cash Compass says a savings account is always a great first account and take it a step further and bring them along to set up the account so they can see the process. From there we can explain the importance of putting money aside and not spending everything they get whether it’s an allowance or birthday money. If they are teenagers, consider getting them a credit card and helping them to establish credit. This way, when they are adults, they will already have some good credit history under their belts and they will be able to apply for loans to start their business or purchase their first investment property. You can also expose them to stocks which can be a bit daunting but with free resources like YouTube and various websites, they can get an introductory lesson in different asset classes and start with a small account.

Krystal feels that our society has made finances such a taboo topic that we are apprehensive when it comes to sharing certain things with our kids that are absolutely crucial for them to understand. They don’t get this information at school and if they don’t get it at home either, where will they learn? Looking at social media they will mostly see the “ballers” and people spending out of control, which isn’t the narrative that will help them learn about good money habits. We don’t have to expose them to every single bill, but at least starting out with food, utilities, cable, and internet so they can see how expensive things are and how we budget for those expenses.  As she mentioned before, having them budget with you is helpful. Outside of food shopping, consider having them budget for things like family vacations or when they want to buy clothes or want new games. Show them how much extra money there is after all necessities are paid for and then they can figure out how to budget for the extra activities they want to do.

Krystal of The Cash Compass , make sure to subscribe to her channel for all the tea!

I asked Krystal what mistakes we as parents make when it comes to discussing money with children. She said we need to do away with having a scarcity mindset above all. A scarcity mindset is an idea of being a victim to your current earnings and feeling “stuck” because you don’t have enough of what you want, so you say no to everything.  Even if money is tight, creating a stressful environment or telling them “we can’t afford that” can create an unhealthy relationship with money because they will grow up thinking that they “can’t” do things because of the money they have is limited. Instead, consider challenging that and asking them how can we afford this? Is there something they can do to earn extra money? Washing cars, selling items they already have, anything that will get them thinking about how to make a way for the things they want in life. We all should be living abundantly and although it may seem like things are out of reach, it is important to still push for what they want and find a way. You can’t live abundantly with a scarcity mindset, you will always have limiting beliefs that will restrict you from being open-minded. Teaching our kids that they can get whatever they want as long as they apply themselves will have them thinking out of the box, developing more of an independent and entrepreneurial mindset, and allow them to really plan out how they will reach their goals and desires. This can apply to anything, not just finances! 

I hope this post was helpful to you all. Let’s build up our community of children to be way better off than we can ever imagine. Thanks once again to Krystal, for sharing her tips with me. Be sure to follow her for all the tea on what’s happening with the current state of the economy. I hope you all remain abundant and chic!



  1. Nordia King
    January 26, 2021 / 9:33 pm

    I recently had a talk with my daughter (11) about finances. I giver her $10 a week for allowance and I also give her $10 out of our weekly grocery budget to purchase whatever snacks she may want for the week. By doing this, I’ve noticed that she’s more conscious about how she consumes her snacks. She’s not devouring her Oreos in one day! She now has a sense of control over her wants. Right now she’s currently saving for a PS5. This was an informative post. Thank you!

    • February 3, 2021 / 10:48 am

      Thanks so much for reading! So happy she is saving toward something at such a young age, she will definitely understand the value of money shortly!

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