How to Talk to Kids About Money: What to Say at Each Age

Start earlier than feels natural, and keep it small. The Consumer Financial Protection Bureau (CFPB), the US federal agency for consumer finance, publishes a parent section called Money as You Grow. It splits childhood into three stages: young children (ages 3 to 5), school-age children to preteens (ages 6 to 12), and teens to young adults ¹²³⁴.

For the youngest stage, the CFPB says children are usually too young to understand abstract financial ideas, but they are already building a foundation for later ². So the goal at this age is not a lecture about budgets. It is a few true, simple sentences, repeated often.

The CFPB's guide to talking about money choices makes three points parents can use today. First, "when you talk to them is less important than how you talk to them." Second, children pick up on your moods and attitudes, not just your words, so a tense money talk teaches something different from a calm one. Third, family events are good openings: its topic list includes getting a pet, buying a car, paying with a credit card, paying bills and moving to a new home ⁵.

Some money topics are sensitive in a family. The CFPB suggests choosing a moment that feels productive and comfortable for everyone ⁵. A child who is hungry, tired or already upset is not the audience for a talk about saving.

Keep it to one idea at a time, in words a young child already knows. The CFPB's page for young children gives four topics, each with a short line you can borrow ²:

• Earning: "You need money to buy things, and you earn money by working."
• Saving: sometimes you have to wait and save before you can buy something you want.
• Planning: big events and everyday activities both need some thinking ahead.
• Shopping: "Every time you spend money, you make a choice", and what you need is different from what you want.

The same page names persistence as the money milestone for this age, meaning staying with a hard task. A puzzle or a block tower is money practice too ².

This is the stage when habits start to form. The CFPB says the focus for ages 6 to 12 is the day-to-day habits that shape how children earn, save and shop, and it suggests asking whether your child has a habit of planning, saving and sticking to goals ³.

Its suggested lines for this stage are short and concrete. For saving: "You can start a habit of putting money aside for things you want." For planning: "You need to make choices about how to spend your money." For shopping: try shopping around and comparing prices and features before you buy. For borrowing: a loan means you pay back what you borrow, plus more, because of charges called interest. For protecting: you need to keep important personal information private ³.

The CFPB also recommends thinking out loud. Narrate your own money and time decisions so your child can follow your reasoning: "When you think out loud, you clarify what you're doing and why" ³. You can say, "I want this jacket, but I am going to wait until the sale ends and see if I still want it."

Teens are starting to earn and make their own money decisions. The CFPB's page for teens and young adults says you are teaching about money "on purpose or not," because children watch how adults shop, spend and plan ⁴.

The milestone it names for this stage is independent decision-making, for example when a teen sets a goal, finds the facts they are missing and follows through ⁴. That changes your role. Ask more questions and give fewer answers: "What do you want to buy, what will it cost, and how will you get there?" The CFPB also suggests sharing skills you already use, such as researching, planning, doing quick math and spotting a good deal ⁴. The same six topics as the school-age stage apply, with more room for the teen to decide: earning, saving, planning, shopping, borrowing and protecting personal information ⁴.

These starters are our suggestions, built around the CFPB topics above. They are not tested scripts, so change the words to fit your child.

Say so, and look it up together. The CFPB points parents to its Ask CFPB pages of questions and answers for exactly this case ⁵. A child who sees you check a fact learns that money is something you can find out about, not something to be embarrassed by.

If the question is about your own family's money, such as what you earn or what the house costs, you can decide what to share. The CFPB notes that some topics are sensitive for families ⁵. "That is a grown-up decision, and here is how we make it" is an honest answer.

Try again another day. One awkward talk does not set a pattern, and the CFPB's advice to use ordinary family events means you will get many chances ⁵. If a conversation turns into an argument about spending, stop, and come back to it when you are calm.

Keep each talk short. A single sentence on the way home from the store, repeated across a year, is worth more than one long speech.

Babalata is a money-habits app for US families with kids ages 6 to 18. It is available on the App Store and Google Play in the United States only. Babalata has no debit card and no bank account. Parents keep the real money.

Kids set savings goals and practice short Money Gym lessons with Babuddy, Babalata's money coach character. Parents get a weekly family report with conversation starters, which can give you something specific to talk about after a week of lessons and savings. Children under 13 need a parent's approval before they can use the app. You can use every idea in this guide with or without any app.