“When should I start talking to my kids about money?” This is a question I received from a dad I was speaking with last week. Great question. When is too early, and when is too late? Let me start with it is never too late to start talking about money with your children. However, I would advocate for sooner rather than later as I believe that our relationship with our children changes from teacher to adviser once our children are teenagers. That means the prime ages to teach your children about money is during the grade school years, but there is no end date in reality.
Start Now
So the time to start talking to your kids about money is as soon as possible. I 
think we should always be talking to our kids about money. Money is so fundamental to everything we do. As our children’s first and most constant teachers, we must talk to them about money. We need to talk about how it works and how it affects our lives. But unfortunately, we are all so busy getting through our days and focusing on our children’s academics and extracurricular activities the topic of money slips through the cracks. Or, if we do end up talking about money, it is often in the context of why we will not be buying them something.
If you want to know what you should be teaching your toddler vs grade-schooler or older, the answer is underwhelming, “it depends.” You need to use your child as a gauge. Just as each child will hit developmental milestones at different ages, children will be able to grasp the concepts of money at different ages. Also, some children show more interest in money earlier than others. So don’t overwhelm your child with financial tables, but don’t keep them in the dark about that card you keep pulling out of your wallet. If they show an early interest in money, you should reciprocate that interest and feed it. But it has to match their abilities.
My First Attempt
When I first tried to give my son an allowance, he just couldn’t keep up with the denominations or basic addition or subtraction. He was interested in money, yes, but he couldn’t manage the actual handling of funds. So we paused the allowance, and we talked about money instead. We talked about why, when he asked for me to buy something why I didn’t always say yes. We talked about how we prioritize the things we spend our money on (which, by the way, was the answer to the previous question). We talked about how to make money; and where to keep our money safe. So while he was not prepared to handle money, he was more than ready to start talking about money.
Only you will be able to gauge where your child’s abilities are. But, I would encourage you to start earlier than later. With that said, I would give a few very high-level suggestions.
When should you start talking to your child about money?
Now, always, and often. It is a topic that runs through everything we do, and we need to demystify it for our children. We want our children to be comfortable talking to us about anything; then, we need to reciprocate that by talking to them about everything. Money, in my opinion, is one of the most important topics we need to speak to them about. You can start from birth. Check out our resources pages for great books for children of all ages that introduce financial literacy concepts.
When should we start teaching them about saving and spending?
As soon as they understand that you need to pay for the food you eat, they are ready to understand these concepts. If you start an allowance with your child, they will get a chance to experience these concepts intimately.
When should we start teaching them about debt and credit?
As soon as they ask to “borrow money” from you. A request for an advance on an allowance is an excellent opportunity to introduce this concept. Don’t wait until your child gets a $10,000 student loan deposited in their account when they are 18 to start talking to them about credit and debt, I’m not saying it’s too late, but you are not doing your child any favours by waiting.
When to start an allowance?
I suggest waiting until your child is comfortable with the coin and bill denominations. They must also be able to do basic adding and subtracting unassisted. On average, this should happen around grade one. I believe by grade three, all families that can afford to give a child an allowance should have started to do so.
I understand that suggesting that you provide your child with an allowance assumes that your family has the resources to provide a family member with a salary for just living, I do not believe in an allowance for chores. I know that this is not always the case. If you are not able or do not agree with the idea of giving your child an allowance, I will encourage you to give your child exposure to money and money management in other ways.
Here are some ways to expose your child to money management. Go grocery shopping with your child. Have them shop for items. Talk to them about pricing, discounts, sales, taxes, quality, scams, deals, and budgeting. But rather than just talking about it, get the child engaged. Instead of a personal allowance, determine your family’s lunch or dinner budget and have your child do the shopping, pricing out items to stay within the budget. If they can stretch the budget, maybe let them keep the difference.
The Objective
The goal behind all of this is to get my child to the point where they are comfortable handling money. I hope to get them some “real world” experience in a controlled space. I want them to know if they blow their clothing budget on some fancy shoes, there is no bailout when the weather turns. And I want them to know if they borrow money from me, they need to pay it back on time. All of this is to help prep them for what is to come.
I know talking about money can be a sensitive topic. But let’s help our kids not feel uncomfortable talking to us about it. Have you started the conversation with your kids? Let me know in the comments.