Financial Education for the Family: For Kids 9 & Over

Kids in general like money, and kids ages nine to 12 are no exception. They start to realize the power of money and what it can buy for them in the future. You can have key conversations with kids about money at this age, including the following:

  • The dangers of online shopping: In addition to savings conversations, you can open up a conversation with kids about online shopping. Talk about how online spending makes it hard to visualize what you buy because you don’t use real money — you use PayPal or a credit card. Always encourage kids to ask first before they buy something online.
  • Help with in-store shopping: When you shop, ask kids to help you compare prices. Generic brands can help you save money.
  • Consider alternatives: Talk about alternatives that can save money, such as borrowing a book from the library instead of buying it.

Financial Conversations to Have with Kids 13 to 15 

Teens can understand a lot of sophisticated conversations about money, and it’s time to start introducing some even more complex conversations.

  • Talk about delayed gratification. Instead of opting for buying something now, make sure you talk through learning how to wait and save instead of having to have it now.
  • Talk about peer pressure. Kids at this age also really want what their friends have, such as new gadgets or new clothing. Encourage them not to cave in to peer pressure so they can make their own individual decisions about money.
  • Explain investing. Yes, now. Show kids a compound interest chart and show them that they’ll end up millionaires if they start investing money in the stock market now. It’s a powerful lesson that only you will teach your kids. Schools don’t tackle this at all.

Financial Conversations to Have with Kids 16 to 18 

Naturally, one of the most important things to talk about with older teens involves the costs of college. College costs, from tuition to fees for books, costs a lot of money, and you can start having those conversations right away in high school. 

  • College loans: You must talk about loans and what it means for your long-term finances. Students should understand that they must pay back loans. Help them visualize how much loans cost by using an online calculator to summarize payments at graduation compared to their potential income (based on their potential major). They may even want to get started saving for college on their own once they realize how much it might cost. 
  • Credit card debt: Talk to your kids about the dangers of credit card debt before college. Credit card offers will start to come to your child — maybe even during college — and it could entrap them for life. Talk to them about what credit card debt means and how interest builds if they don’t pay off their credit card each month. Explain how much responsibility a credit card entails and why they need to remain really careful about debt. 
  • Insurance: Explain how necessary insurance is, from health insurance to life insurance to an emergency fund. Your teen should always prepare for the unexpected, from a flat tire to a major health emergency. 

Don’t be afraid to talk about any mistakes you made with credit with your older teen. These conversations might not be any fun at all but they can help your teen avoid the same mistakes you’ve made in the past.

Disclosure

College Savings Calculator is a hypothetical tool that demonstrates how monthly contributions, age-based asset rebalancing, and tax savings may impact the long-term value of your account, and do not take into account a portfolio’s underlying investment management fees. Calculations assume the private institution cost inflation is 2.8%, public out of state cost inflation is 3.9%, public in state cost inflation is 2.7%. Portfolio is assumed to have only stocks and bonds. Monthly equity returns are based on the historical data from the 10-year track record of the stock market (SPY). Monthly fixed income returns are based on the historical data from the 10-year track record of the bond market index (AGG). The current college expenses are provided by the collegeboard.org. Actual account performance may differ due to market fluctuations, changes in recurring investments, and asset allocation. The information provided here is for illustrative purposes only and does not represent actual or future performance of any investment option and is not intended to predict or project the investment performance of any security or index.