As parents face rising costs and a tighter overall economic climate, more are using the challenge as an opportunity to have candid conversations with their kids about money, a recent survey found.
Brad Klontz, a financial psychologist, author, and associate professor of economics at Creighton University, says having honest conversations with your kids about saying “no” when they ask you to buy something and explaining why can help them develop early foundations of financial literacy that will help them later in life.
In a survey of 2,000 U.S. parents released March 31 by financial software company Intuit, nearly two-thirds (64%) of parents with children under 18 said that recent financial hardships require them to be more transparent with their children about how they manage their money. 66% of respondents reported saying “no” to purchase requests more often when explaining their reasons to their children.
Children don’t necessarily learn much about money at school. As of March 2026, 39 U.S. states have passed a personal finance course as a requirement for high school graduation, up from just 12 states in 2022, according to the Council on Economic Education.
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However, research shows that children can start learning lasting money habits as early as age 5. Also, a 2022 study by researchers at Brigham Young University found that children who learn financial literacy early are more likely to develop a healthy relationship with money that helps them improve their financial and overall well-being as adults.
You might explain to a young child that an expensive video game console isn’t in your family’s budget, or tell a teenager how you saved up for a college education. When parents talk to their kids about money, Klontz says, “those kids end up in a much better financial position later in life than if they had to learn it the hard way.”
Silencing your child’s money questions is a ‘big mistake’
Research shows that many parents feel taboo about talking about money with their children, especially about their family’s finances and spending habits. Some parents are ashamed of their financial literacy status, Klontz said, and may avoid discussing it out of fear that money will be tight.
But when talking about money with kids, avoidance is a “big mistake,” Klontz says. Even if you are asking your child to purchase something that is out of your family’s financial reach at this time, never shut down your child’s questions about the topic. Saying “no” to your child’s latest spending request is a great opportunity to follow up with thoughtful and helpful reasons for your decision, he added.
“This is a stressful and taboo topic, and we don’t want to send the message to our kids that ‘we don’t talk about it,'” Klontz said. Such an approach can undermine children’s long-term financial literacy, he says, especially if they grow into adults who don’t talk or think about their own budget plans.
Klontz recommends explaining what families choose to spend their money on and why, and what they’re doing with the money they don’t spend, such as investing or saving for important or fun purchases in the future. “Sit down and say, ‘I want a new TV, or I have another financial goal, so I’m going to save X amount of money every paycheck,'” he says.
Klontz says you can communicate your financial values and goals to your children while giving them a concrete path to achieving them. Otherwise, “You may have been saving in the background, but they never saw it. You were never letting them save for anything. That’s a big mistake we make as parents.”
Provide practical lessons and don’t overshare
More than half of parents in the Intuit survey said they take their kids grocery shopping to get a first-hand look at typical household expenses, and 38% said they discuss regular expenses like rent, mortgage, and utility bills with their kids. Personal finance experts say these practical lessons can help teach kids to think carefully about prices and how much to save for future purchases.
“If you’re walking in a store and your child says they want something, pick it up (and) show them the price,” Alexa von Tobel, founder and managing partner of venture fund Inspired Capital, told CNBC Make It in February 2024. “‘This costs $29. Mom doesn’t have $29 to buy this today, but you can think about saving it for her birthday.'”
Klontz offers one “caveat” to transparency strategies. The idea is to design the conversation in a way that is age-appropriate and not too stressful. Family wealth experts say elementary school children can be expected to understand basic money concepts about the value of money and the concept of factoring costs into purchases. Middle school students may be better prepared to discuss complex concepts such as budgeting and long-term savings.
Just be careful. Unnecessarily scaring or stressing your child can create an unhealthy relationship with money, Klontz says. If money is tighter than usual, she advises calmly explaining why your family is cutting back on certain expenses for a while, and reiterating that everything will work out for you and your family in the end.
“They may inherit some of this fear (and) anxiety, and it manifests itself in very harmful ways later in life,” Klontz says. “Kids have really good bullshit detectors. I think it’s okay to say, ‘Look, this is stressful. I don’t know exactly what’s going on, but believe me…we have this,'” he says.
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