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Kids and money

Kids will eventually need to manage money, yet most learn from osmosis and mistakes rather than deliberate teaching. A parent who reads financial books but never talks to their kids about money is essentially saying "figure it out yourself," and most kids figure it out wrong.

But teaching kids about money doesn't require being a financial expert. It requires consistency, honesty, and letting them experience natural consequences at low stakes. A child who runs out of allowance and has to skip a toy purchase learns far more than one who always gets bailed out. A teenager who works a summer job and saves for something they want understands money's value in a way that receiving handouts never teaches.

Research shows that kids who learn financial concepts early—even in elementary school—make better financial decisions as adults. Not because they become obsessed with money, but because basic concepts like scarcity and choice become intuitive. This chapter helps you build that foundation age-appropriately.

Allowance and the value of work​

Allowance teaches the connection between effort and reward. But it only works if the allowance is consistent, if the amount is meaningful enough to matter, and if parents resist the urge to bail kids out. This chapter explores allowance systems that work—tying it to age, to chores, to work, or to some combination. You'll also explore how to handle situations where kids make poor choices and the learning opportunity that creates.

Saving for education: 529 plans​

A 529 savings plan is the tax-advantaged way to save for college, but the mechanics confuse most parents. You'll learn how 529 plans work, how they affect financial aid, and whether a 529 is the right choice for your situation compared to other education funding vehicles. You'll also explore when to start saving, how much is "enough," and what happens if your kids don't go to college or get scholarships.

Custodial accounts and early investing​

Parents often ask when kids should start investing. The answer is younger than they think, thanks to custodial accounts that let minors own investments in their name. You'll explore Roth custodial accounts, the earned income requirement, and how to teach investing principles through actual small-scale experience. A teenager who owns even a small stock portfolio begins to understand compound growth in a visceral way.

Financial literacy foundation​

The goal of teaching kids about money isn't to turn them into accountants. It's to build foundational understanding: that money is finite, that choices have tradeoffs, that some things cost more than others, that some purchases bring lasting value while others bring brief satisfaction. This chapter helps you build these concepts through age-appropriate conversations and experiences, starting as early as five or six years old.

Preparing kids for adult financial life​

By the time your kids leave home, they should understand how to open a bank account, how credit works, what taxes are, and how to create a basic budget. They should have made some financial mistakes at low stakes and learned from them. They should know how to advocate for themselves. This chapter helps you build these skills progressively across childhood and adolescence.

Articles in this chapter​