How to Raise Money Smart Kids


How often do you talk about money with your kids? Do they know how much your cable bill is each money or how much it costs to go out to dinner? While talking about financial matters with your kids might seem unnecessary or even make you uncomfortable, studies have found that kids benefit greatly when their parents talk about money with them.

How to Raise Money Smart Kids

T. Rowe Price's 2015 Parents, Kids & Money Survey revealed that having conversations with kids about money is critical to raising financially savvy kids. Here are three key ways to help raise money smart kids.


Start talking about money. From how much your electrical bill is to how to calculate restaurant tips, find ways to make money a part of your conversations with your kids. A 2015 Parents, Kids & Money Survey by T. Rowe Price found that talking to kids about money is vital for helping your kids gain financial smarts. The study found that 46% of kids whose parents frequently talk to them about money feel smart about personal finances, compared with just 14% of kids whose parents don’t frequently talk to them.


Give an allowance. The study found that kids who received an allowance had a number of advantages over kids who didn't. Parents who give their kids an allowance were more likely to have kids who:

  • Say they are knowledgeable about managing personal finances (32% vs. 16%).
  • Feel they are smart about money (40% vs. 25%).
  • Think their parents are doing a good job teaching them about finances (52% vs. 31%).

While there are lots of debates over when to start, how much to give, and if it should be tied to chores, giving your child an allowance is a great teaching tool to help them learn about money management.


Let them make money mistakes. This one can be hard for many parents, but remember, you'd rather have them start learning these lessons at age 9 or 10 instead of at age 20. So let them blow $15 or even $50 on a toy they'll soon regret rather than blowing $100 or $1000 later on. The Parents, Kids & Money Survey found that parents who let their kids make financial mistakes are more likely to have kids who say they are knowledge about managing personal finances (36% vs. 16%) and, a win for you, say their parents do a good job teaching them about money (52% vs. 40%).

Not sure where to start? Look for money lessons in your every day life as starting points. Highlight the total on your next grocery shopping trip, show them how you price compare when you're searching for holiday gifts, or explain what sales tax is and how it is calculated. Or try 


T. Rowe Price created this site to provide free online games for kids, lessons for educators, and tips for parents focused on financial concepts such as goal setting, spending versus saving, inflation, asset allocation, and investment diversification. Start the conversation now so your money-smart kids can turn into money-smart adults.

Momtrends was not paid for this post.

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