7 ways to include your kids in your finances

February 1, 2023

In the Nelson family, we talk about finances with our kids.

Ryan and I feel strongly that this approach makes it easier for our girls to develop a healthy relationship with money, and to develop good financial habits throughout their lives.  

The goal for my family is that we would see finances as choices and not place an undue burden on our children. Finances can have stressful moments, and it’s okay to let the kids know we can become overwhelmed—while making sure they know they’re not responsible for fixing it.

Of course, every family is different—there are so many variables, ages of your children, how they are motived, their interests, etc.—and I can’t prescribe a specific approach for your family. What I can offer you is how we have included finances within our family. My girls are 10 and 12, and here are some ways, as a family, that we incorporate our finances into everyday life. 

1. Define the difference between needs and wants. This is a big one we’ve ingrained in our kids from a young age. Their needs we take care of; if they want something that’s not a need, they use money from their checking account. Katherine is a sucker for gift shops everywhere we go, and she’s learned that’s a want. “It’s a want, Mom, transfer my money.” Just so you all know, music lessons and books are classified as needs in our family. It’s important to set your priorities. They will look different in each family. We have been talking a lot about choosing between all our wants lately and trying to prioritize when we can afford them.  

2. Talk about issues related to our finances openly. Here’s our latest example: We decided to add additional term insurance (a type of life insurance policy) on Ryan. Transferring out of the military, we opted not to continue with the insurance available. Ryan came home and said that he had gotten approved for the Term Insurance we wanted through USAA. The girls were in the kitchen and asked, “What is insurance?” That lead to a conversation about what insurance is, why we have it, and what different types we currently have. Sally immediately said, “Will you let me know when I need to get insurance? I want to be prepared.”  

3. Let them know what type of financial accounts we have. We talk about what kinds of accounts we have. They know what a checking account is, and they’re learning more about credit cards and borrowed money. We’ve discussed our mortgage, and they know that it will be paid off in 28 years if we don’t make additional payments. They also know a little bit about the retirement accounts we have.  

4. Help them understand what accounts they have. Our girls have checking and savings accounts in each of their names. When they want to buy something that isn’t a need, we transfer the money from their checking account to our family checking account. The savings account they are not allowed to touch. They are starting to see the effects of their savings growing and their checking account fluctuates based off their purchases.  

In addition, they each have a 529 Plan, which is a college savings plan. We have been saving into these accounts since they were born. This is where we have introduced investments. Recently the girls have been asking about college, what it’s like, and how they will decide where to go. 

5. Let them observe you working on your finances. I pay our bills at our dining room table. They see me writing checks or transferring money online. Recently, I was sitting down writing a check to the trash company and Sally asked, “Mom, where do you balance your checkbook?” Sheepishly, I said I don’t. Turns out, she had learned how to balance a checkbook in her math class that day. I showed her how instead of a checkbook register, I keep track online, so I never spend more than we have. Later, I showed her QuickBooks, the accounting system I use for my business account. Sally’s always been my numbers girl, and I look for ways to keep fostering her interest. At age 4, she started typing in the numbers when I was doing our taxes. I should have her do it this year with me, too! 

6. Set expectations for your kids. I’ve tried all different kinds of allowance systems for chores. I have tried honor systems, written charts, and even cash given at the end of the week. Honestly? This failed miserably: I never had cash, and it was hard to keep up with. I tried apps, but I just don’t like spending extra time on my phone or tablet.  Finally, we landed on a system of setting expectations. We wrote down all the things they were expected to do daily. They agreed to them. Then we opened checking and savings accounts for each of them. I have money that automatically goes into their accounts. Checking is for their spending on their wants, and savings they can’t touch. If we must give them any reminders during the week on what is expected of them, I shut off the automatic deposit to their checking account. We must find what works for the parents and for the kids.  

At the end of the day, there’s no one way to talk with your kids about money. For me, I’ve found the more it’s incorporated into our everyday lives, the more real it becomes. I love the conversations we have when we talk about what is important to each of us—what we enjoy and what we’re good at. It leads us back to the idea we have choices when it comes to our financial decisions. For our family, incorporating the girls into our finances is a way of verbalizing the financial journey we’re already on.  

If you have ways you incorporate your kids into your finances, I would love to hear them. I love talking with my friends and acquaintances about what has worked for their families and finances. It’s a fluid process that will change and evolve as my kids gain more responsibilities and independence. Please reach out if you would like to dig deeper into talking with your kids about money.  

7. P.S. Bonus Tip 

What to do with cash? When the girls get cash, like for a birthday present, they put this in their “piggy banks” in their room. They use this money for purchases at school, such as little gifts for friends on a holiday, or snacks at games or dances. We have an 80/20 rule for money given via Venmo or check. 80% goes into their checking account to spend how they wish, and 20% goes into savings.  


The opinions expressed herein are those of Anna Nelson and are subject to change without notice. This material is not financial advice or an offer to sell any product. Forward-looking statements cannot be guaranteed. This document may contain certain information that constitutes “forward-looking statements” which can be identified by the use of forward-looking terminology such as “may,” “expect,” “will,” “hope,” “forecast,” “intend,” “target,” “believe,” and/or comparable terminology. No assurance, representation, or warranty is made by any person that any of Anna Nelson’s assumptions, expectations, objectives, and/or goals will be achieved. Nothing contained in this document may be relied upon as a guarantee, promise, assurance, or representation as to the future. Anna Nelson is an investment adviser registered with the U.S. Securities and Exchange Commission. Registration does not imply a certain level of skill or training.