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Experts say the way parents frame money conversations with children matters as much as what they share, helping build understanding without creating unnecessary pressure.
When David Walter’s preteen daughter offered to contribute rent money out of the blue, he decided it was the perfect moment to talk about housing costs. “She’s a bit of an entrepreneur,” he said of his eldest of four kids. The 11-year-old was already earning her own money, buying and selling repackaged items.
Walter, a financial planner at Sun Life, recalled discussing housing costs and why it was inappropriate for parents to charge a preteen for accommodation. However, that income could still be put to good use. He recommended his daughter sock the money away in a savings plan for her education, her first car, or another bigger goal. And so she did.
Walter started introducing his kids to household finances when they were about seven, and he is a firm believer that most families should, too. He says it lays the groundwork for kids to approach money talks with ease and curiosity as they grow up and begin to handle their own finances.
But experts say it’s important to know how to frame those conversations without burdening your child with the drudgery of everyday finances.
Bruce Sellery, CEO of Credit Canada, said including kids in household money conversations isn’t just about making it age appropriate, but also temperamentally appropriate. “Some kids can 100% engage on this stuff, and for other kids, it’s just not the right approach,” he said.
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Sellery said parents should think about why they may want to include their kids in money-related discussions. It could be to have a shared vision and goals as a family or to financially educate your kids. You might want your child to file their first tax return from their part-time job, he said.
Another could be shared engagement on trade-offs, Sellery said. For example, as a family, maybe you’d love to go to Disney World, but there are other expenses you might need to consider, such as hockey and tutoring, or a need to buy a new car. “As a family, what do we think the priorities are?” Sellery said. “You have to be very intentional about that because who are your kids? What’s your financial reality?”
He added parents need to be aware if they can take feedback from their kids and not just talk to them for the sake of conversation.
Sellery said the conversation will also look different based on the financial well-being of a family and what the parents are comfortable sharing. At his home, Sellery talks about everything, as long as the information is publicly available. That means the information about the value of the house and mortgage payments is on the table, but sharing salary figures with their teenager is inappropriate, in his opinion.
“The reason I don’t talk about salary is, I think, in the wrong hands and without context, it is inappropriate,” he said.
Related reading: Teaching kids 7 to 12 about how to save and not overspend
Edward Jones financial adviser Ryan McLellan has his own way of starting a conversation about the cost of living with his teenage kids. “I put it up on the fridge. My credit card bill sits there. The property tax sits there,” he said. And his kids then ask him about why the family is paying so much to the government for the property. That’s when McLellan would explain how taxes work, and in general, the social structure of money.
The goal isn’t to overwhelm the kids with how much life costs and what a household cash flow looks like, experts say. “You still want kids to be kids, so you’re not trying to …put pressure on them,” Walter said. “You’re just trying to educate them so they can make decisions.”
It can start small. For instance, talking about the fact that groceries can be expensive, so be considerate about not wasting food. Or how money received as gifts from grandparents can be put into savings. Walter said the ages from 13 to 18 can be a really good time to introduce concepts like compound growth and savings.
However, he said it’s important for kids to understand the difference between having money-related discussions with their family in a safe space, versus with outsiders. “Other people might not feel that same comfortability,” he said. “They need to also be aware of or just understand what’s socially acceptable in that scenario.”
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