What Not to Tell Your Kids About Money

When I was about ten, a neighbor told me her parents had a million dollars saved for retirement. I didn’t believe her—a million dollars felt like an impossible number. Whether it was true or not, knowing that information didn't help me one bit. It just felt awkward. This highlights a tricky part of child financial education: knowing what to share and what to keep to yourself.

Navigating family personal finance is about balance. You want to be open, but you also need to protect your kids from information they aren't equipped to handle. Some financial topics are best kept between the adults. Let's walk through what to avoid discussing and then dive into a practical, age-by-age guide to building real financial skills.

Money Conversations to Skip With Your Kids

Here are a few topics that can do more harm than good when discussed in front of your children.

1. The Exact Amount in Your 401(k)

Your retirement accounts, savings, and investments are your business. A child doesn't have the perspective to understand that a large sum in a 401(k) isn't cash you can tap into today. To them, it's just a big number, and they can't grasp that it needs to last for a very, very long time.

2. Your Opinions on Relatives' Spending Habits

Every family has its characters, and money is often at the center of family drama. Maybe your brother owes you $1,000 but just booked a trip to Aruba. Venting about this in front of your child can create a lasting negative impression. Your child will remember the slight long after your brother has paid you back. If you want to teach a lesson about lending money to family, use a hypothetical story about people they don't know.

3. How Much You Pay the Babysitter

It’s fine to explain that babysitting is a job, but never tell your kids the hourly rate. Knowing how much their caregiver earns gives them an informational upper hand you don't want them to have. The caregiver’s job is to be the authority figure when you're not there, and revealing their pay can undermine that authority.

4. What You Spent on a Gift

Mentioning the price of a gift strips away the joy of giving and receiving. The value of a present isn't always tied to its cost; some of the best gifts, like building a fort in the living room, are free. If a child is upset about getting fewer presents one year, use it as a teaching moment. Explain that as they get older, the things they want often cost more, so relatives might pool their money for one big gift, like an iPad, instead of several smaller ones.

5. How Much You Worry About Paying for College

The thought of paying for college can be terrifying for most parents. While it's good to discuss college planning & funding when your child is in high school, there’s a big difference between having a purposeful conversation and radiating anxiety. Avoid ranting about how expensive college is. Your kids might misinterpret your stress and start seeing higher education as a burden they're placing on you. Instead, frame it as a priority you are happy to save for.

The Most Important Skill: Learning to Wait

You might know the famous Marshmallow Test. Young kids were given a marshmallow and told they’d get a second one if they could wait and not eat the first one. Researchers followed these kids for decades and found that the ones who waited were significantly more successful as adults.

This isn't just about marshmallows; it's about self-control, which is directly linked to saving money. People who are good at delaying gratification are better at setting money aside and avoiding impulse buys. The good news is that this isn't just a trait you're born with. The core of financial responsibility development is teaching your kids how to wait. You can help them build this muscle, turning the impulse to "get it now" into the power to "save for something better."

An Age-by-Age Guide to Raising a Saver

Your job as a parent is to help your kids learn to wait, save, and eventually buy some things with their own money. Here’s a breakdown of how to approach it at every stage.

Preschool (Ages 3-5)

• Make Saving Tangible: Very young kids don't understand money, but they can grasp the basics. Use three clear jars: one for saving, one for spending, and one for sharing. When they get money, have them physically put a portion into each jar. The act is more important than the amount.
• Focus on Waiting: Use everyday situations to talk about the benefits of waiting. In line for the swings, explain how everyone gets a turn. Talk about how exciting it is to wait for a birthday or holiday, and when the day comes, mention that it was worth the wait.
• Praise Effort, Not Talent: When your child accomplishes something, praise the hard work they put in, not just their natural ability. Instead of "You're so smart," say, "I love how you kept trying until you figured it out." This builds grit.

Elementary School (Ages 6-10)

• Establish a Saving Rule: Create a simple rule of thumb, like "save a quarter for every dollar you get." Consistency is more important than complex math. You want saving to become an automatic habit, like brushing their teeth.
• Open a Bank Account: Now is the time to move from a piggy bank to a real bank. Take your child to a local bank or credit union to open a savings account. Point out the FDIC or NCUA sign and explain that it means their money is safe.
• Introduce Interest: Explain that banks pay you a little "free" money called interest for keeping your savings with them. The amount will be tiny, but the concept is powerful for a kid. This is a foundational piece of child financial education.
• Don't Connect Allowance to Chores: Chores teach responsibility and teamwork; they're about contributing to the family. Allowance is a tool for learning how to manage money. Keep them separate. You can pay for extra jobs above and beyond their normal duties, but emptying the dishwasher is just part of being in the family.

Middle School (Ages 11-13)

• Teach About "Zeroing Out": It’s great to save for a big item, but your kid shouldn't spend their very last dollar on it. Teach them to always keep a small buffer in their account. Having no money leaves you with no choices.
• Compare Interest Rates: Sit down with your child and use a site like Bankrate.com to compare savings account rates. Even if the difference is tiny, you're teaching them the valuable skill of comparison shopping for financial products.
• Stick With Commitments: This is the age where kids might want to quit an activity midway through. Insist they finish the season or the year. This teaches them to honor obligations, a key aspect of financial responsibility development.

High School (Ages 14-18)

• Focus on College Savings: This is when college planning & funding becomes a real conversation. Make it clear that you expect your child to set aside a portion of any money they earn for college. Research shows that students who contribute to their own education costs tend to have higher GPAs.
• Explain Taxes: When they get their first real paycheck, sit down and explain the difference between gross and net pay. Walk them through what FICA, Social Security, and Medicare are. It’s a real-world lesson they need.
• Consider a Roth IRA: It may sound crazy, but if your teen has earned income from a summer job, putting even a small amount into a Roth IRA can be a game-changer. Explain the power of compound interest: $500 saved at 16 could grow to nearly $14,000 by age 65 without adding another dime.

College and Young Adulthood

• Build an Emergency Cushion: Life happens. Your adult child needs a safety net that isn’t you. The goal is to save three to six months' worth of living expenses for emergencies, like a car repair or a sudden job loss. Start small and make it automatic.
• Prioritize High-Interest Debt: Explain that paying off an 18% credit card is a better financial move than earning 1% in a savings account. It’s a guaranteed 18% return on their money.
• Make Saving Automatic: The easiest way to save is to not even see the money. Help them set up an automatic transfer from their checking to their savings account on every payday.

Ultimately, great family personal finance isn't about having one big "money talk." It's about thousands of small conversations, consistent habits, and a clear-eyed approach that prepares your child for the future.