Challenging conversations about money: How to talk to your kids about money at every age

Thomas Thiegs, PhD., Senior Leadership & Legacy Consultant, Ascent Private Capital Management of U.S. Bank, offers a guide to getting this often-daunting discussion started

For Parents can start talking to children about money as early as the toddler years and should tailor those conversations to each child’s age and life stage. According to Thomas Thiegs, Ph.D., Senior Leadership and Legacy Consultant at Ascent Private Capital Management at U.S. Bank, the guiding principles are simple: start early, start simply and add complexity as children mature.

Why talking to kids about money matters

For many parents, money was never an open topic at the dinner table. That silence can make it feel awkward to break the pattern with their own children.

“While we recognize that it’s not always easy talking with children about money, there are many benefits to having open, honest and transparent conversations,” said Scott Ford, president of Wealth Management at U.S. Bank. “I, for one, am committed to doing so with my children.”

Thiegs has spent his career helping families navigate these conversations. His approach centers on age-appropriate messaging: match the concept to the child’s developmental stage, and build on it over time.

How do you talk to toddlers about money?

“Start by talking about the relationship between work and income, which allows you to have money to spend,” Thiegs said. “You can begin by saying something like ‘We work in order to earn money to buy things.’ You can discuss what you do at your job and how the money you earn helps fund your lifestyle.”

To make the concept concrete, connect it to something your child already cares about. When they ask for something at the store, explain that buying it now means that money won’t be available for something else later.

One effective exercise: give your toddler $5 and let them choose how to spend it.

“This reinforces the finite nature of money and that we exchange it for the things that are truly important to us,” Thiegs said.

What financial habits should you teach preteens?

The preteen stage is when children begin to have spending power of their own — through allowances, paid chores or gifts. That makes it an ideal time to introduce structured saving, goal-setting and learning the concept of charitable giving, he said.

“I’d recommend starting with a cash allowance and shifting some of their discretionary purchases to them, as it puts a ceiling on spending,” Thiegs said. “As they become familiar with living within a set limit, children can advance to a debit card.”

Encourage preteens to deposit earnings into a bank account and set concrete goals, such as saving for a game or a piece of clothing. Letting preteens choose a charity they care about also makes giving feel meaningful rather than obligatory he said.

“Kids connect with charities they have a natural interest in — animals, the environment, music and art,” Thiegs said. “You can give them a budget whereby they decide where to donate their money.”

How do you discuss money with teenagers?

The teenage years introduce real financial complexity. Teens often earn their own income through part-time or summer jobs, face social pressure to keep up with trends, and are on the cusp of major financial decisions like college. According to a 2024 U.S. Bank survey, 47% of parents believe it is their responsibility to set financial boundaries for their children.

Credit and spending

“Parents can consider providing a credit card in a child’s teen years and instill the virtues of using it prudently and paying off the balance each month,” Thiegs said. “Teaching teens how to spend and manage a virtual account in their teen years can help them avoid some of the issues many face if their first experience with credit cards is in their 20s without parental support.”

A good credit score not only helps people get a mortgage and car loan, but it also impacts the chances of getting a job and renting an apartment, Thiegs noted.

Work, taxes and saving

A teen working a summer job opens the door to conversations about how taxes affect take-home pay, the value of direct deposit, and the importance of saving for future expenses like a car or college tuition. According to a 2024 U.S. Bank survey, 64% of parents are already having conversations with their children about college costs and how to pay for them.

Investing fundamentals

“Parents know that it’s important to impart basic financial concepts, teaching their children about things like stocks, bonds, mutual funds, ETFs, 401(k) plans at your job, IRAs and other financial foundational basics,” Ford said.

“Talk about the ups and downs of investing, conservative and aggressive investments, and the possibility of loss,” Thiegs said. “Teens can invest in the companies that make the products they love — cellphone/laptop manufacturers, clothing brands, restaurant chains and more.”

How should you handle money conversations with adult children?

Keep the dialogue open — and address the harder topics before they become urgent.

Financial conversations don’t stop when grown children leave home. According to a 2024 U.S. Bank survey, 43% of parents said their children don’t manage money in ways they agree with, yet 79% said their children are able to successfully manage their finances. Still, nearly four in 10 parents (37%) worry their children will require financial assistance into adulthood.

When young adults begin full-time careers, the conversation naturally shifts to longer-term planning.

“The power of tax-advantaged investing is considerable,” Thiegs said. “Especially over the course of a decades-long career.”

As adult children form their own families, parents may also want to introduce topics tied to their own senior years — wills, estate plans, legal documents, insurance and healthcare preferences.

“Health, aging and money are potent topics and can make for awkward conversations,” Ford said. “Despite the sensitivity, it’s best not to postpone these types of discussions because the risk of something going wrong can increase with age. It’s best to face these tough talks with confidence.”

What are the best ways to talk to younger kids about money?

Use these practical strategies to lower the stakes and start the conversation naturally:

• Start casually. Bring up money during an everyday moment. Don’t treat it as a formal event.
• Start small. Look at household bills together. Discuss what everyday things cost.
• Assign small jobs. Let kids earn a little money by doing chores. Connecting effort to a reward helps them understand where money comes from.
• Deliver information in bite-sized pieces. Offer one concept at a time and leave room for questions.
• Make it a regular habit. The only way to reduce the taboo around money is to talk about it often. Conversations don’t need to be serious or scary.
• Give everyone a voice. Involve kids in age-appropriate household financial decisions and let them weigh in.
• Keep the tone positive. Approach money topics with curiosity and calm, not anxiety.
• Be open about your own experiences. Share your financial wins and setbacks honestly.
• Talk about college costs when the time is right. Walk through tuition, room and board, and the different ways to cover those expenses.
• Align with co-parents first. If there’s more than one head of household, agree on the key messages before talking to children.

What should you say to adult children about finances?

Use these strategies to continue the money conversation once your kids are grown:

• Start now if you haven’t already. There’s no ideal moment — begin as soon as you can.
• Choose a relaxed setting. Plan ahead, pick a low-pressure environment and think of it as an ongoing series of conversations.
• Use life events as natural entry points. College, a first job, a car purchase, a wedding or buying a home all create an organic opening.
• Ask direct, caring questions. Can they afford their rent? Do they carry student loan debt? Are they setting anything aside each month?
• Set clear terms if you offer help. If they need financial support and you’re in a position to provide it, decide together on any expectations or conditions.
• Don’t judge how they spend. Resentment builds when parents police adult children’s spending choices. Focus on the bigger picture.
• Provide context about your own history. Sharing your own saving journey — including your missteps — can help adult children feel less alone in theirs.

The role of a financial professional in family money conversations

Many families find it easier to tackle uncomfortable financial topics with a neutral third party in the room. According to a 2024 U.S. Bank survey, more than half (53%) of mass affluent Americans said their financial professional helped their family work through uncomfortable conversations about money.

A skilled financial professional can act as a facilitator, creating space for honest dialogue about wealth, expectations, estate plans, and long-term goals. If your family has been putting off these conversations, reaching out to a financial professional is a practical first step.

Read the full report here: Challenging Conversations About Money