In affluent households, teaching kids about money comes with unique opportunities and responsibilities. These children often benefit from a distinct set of advantages, like access to high-quality education, financial safety nets, and strong social networks, which may shield them from the financial challenges many of their peers face and learn from.
This privilege isn’t negative, but it can create blind spots. It can unintentionally delay or dilute financial awareness, which is why consistent education throughout childhood is so important. The goal is to raise grounded, capable young adults who understand the value of money, the importance of stewardship, and how to make smart financial decisions that align with their values.
Here is a how-to guide:
Ages 3 – 6: The basics of value and choice
At this age, kids are starting to understand cause and effect. Use this time to teach concepts like:
- Delayed gratification: If they want a toy, have them wait a few days or save up an allowance to buy it.
- Simple trade-offs: “Would you like one today, or two if you wait until next week?”.
- Money as a tool: Let them “buy” snacks with play money at home or real money at the store to show how exchange works.
Avoid making everything instantly accessible. Even if you can afford something, teach your kids that planning for a purchase is important. Don’t shy away from the “not right now” conversation, or even simply saying “no”.
Ages 7 – 12: Earning, saving, giving
These years are a great window to introduce real money concepts, including:
- Allowance tied to chores: This helps reinforce the link between effort and earnings.
- Budget buckets: Have jars for saving, spending, and giving, and help with allocating funds and usage.
- Financial literacy games: They can learn key principles in a fun way.
Be transparent, but age-appropriate, about family wealth. Kids can handle discussions about your family’s financial place in the world. Instill the importance of working and creating financial stability for yourself and your family. Have conversations about supporting others and encourage philanthropy.
Ages 13 – 17: Building responsibility and confidence
Teenagers are ready for more complex financial concepts. At this stage, introduce:
- Bank accounts: Open a joint checking or savings account and show them how to track balances.
- Budgeting: Give them a monthly budget for discretionary items like clothing, entertainment, or eating out, and let them manage it.
- Consequences of overspending: If they run out of money, let the lesson stick.
Start conversations about lifestyle choices, and how money can provide freedom to accomplish goals. Be consistent with talking about financial responsibility: paying bills on time, saving now for your future self, and figuring out daily wants versus needs. Set the expectation that your kids will earn their first car or contribute to the purchase, rather than giving it to them outright.
Ages 18 – 22: Adulting and long-term thinking
As your child heads into early adulthood, shift the focus to independence and long-term awareness by introducing concepts like:
- Budgeting for college or living expenses: Include categories like rent, groceries, and personal expenses, and review monthly.
- Credit and debt management: Teach how credit cards work, the importance of paying in full, and how interest accumulates.
- How to invest: Introduce basic principles like compounding, diversification, and risk tolerance.
Involve your children in family financial discussions, when appropriate, such as business ventures or supporting charitable causes. Encourage getting a part-time job or volunteer position while they are in college to foster increased independence, perspective, and work ethic.
High net worth families have an excellent opportunity to teach kids how to thrive financially, because they can. The most successful transitions of wealth often happen when financial literacy is taught alongside family values, character, and stewardship. If you would like additional guidance on how to teach your kids about money, don’t hesitate to reach out.
Disclaimer: This material is for informational purposes only and should not be considered financial, tax, or legal advice. Always consult with a qualified professional regarding your specific situation. All investment strategies involve risk, and there is no assurance that any strategy will achieve its intended results.