Around two-thirds of Americans are tracking their income and spending, according to a 2023 research review from the University of Chicago Booth School of Business.
So while making a budget doesn’t appear to be a challenge for many, teaching your kids the same skills is a different matter. More than half of parents say they have a hard time talking about money in a way that their kids will understand, a 2025 study from Wells Fargo found.
Parents often struggle to balance controlling their kids’ spending and letting them make their own money mistakes, the study found. In the end, though, parents were decisive on the importance of monitoring their children’s spending, as 87 percent believed that “monitoring my kid’s spending helps me guide them toward better financial habits.”
While parents tend to agree that monitoring their kids’ spending builds good financial practices, teaching about budgeting can be intimidating. Remember, though, that your kids will learn about budgeting and financial literacy regardless of whether you offer advice – so lead the way, said Victor Wang, CEO at family-focused investing platform Stockpile.
“With money, as with any tough topic, when we stay silent, kids fill the gap with advice from friends or social media,” Wang told The Independent in an email. “Those sources aren’t necessarily bad, but they can conflict with your values or even be harmful. One way to look at it is that you, as a parent, should be your kids’ first money influencer.”
Talk at their level
One of the key steps in teaching your kids about budgeting is to adapt your approach based on how old your child is – advice given to a five-year-old needs to be presented in a vastly different way to a 15-year-old.
Visual aids for little kids
For kids five and under, keep the advice concrete and tactile, Wang said. Start by letting your kids hand cash to the cashier while you’re shopping. A savings jar is another important technique, as it gives your little one a visual way to understand saving.
Yet savings is just part of budgeting; spending also plays a role. Wang says parents need to remind small children what they’re saving for.
“Use simple language like, ‘We’re saving these coins for ice cream later,’ to show what money is and what it can do,” he said.
A weekly allowance for elementary-age kids
If your children are in elementary school, consider a $10 weekly allowance to show your kids how taxes and expenses work, said Larissa Adamiec, a financial economist and clinical associate professor at Purdue University.
However instead of giving your child the entire $10, take $1 or $2 out for taxes, $2 for long-term savings of at least 10 weeks, and $4 for short-term savings of at least four weeks.
“The rest of the money [would have] no restrictions,” Adamiec said in an email to The Independent. “This technique then demonstrates how to view saving for an item and the appreciation of that purchase.”
Challenge your older kids and give them freedom
As your children grow older, you can introduce more advanced financial and budgeting concepts.
“While they probably already know the basics of what money is and how it works, you can start with topics like paying bills, investing for future goals, what taxes are and how they work, or the difference between debit cards and credit cards,” he said.
Additionally, it’s important to give your tween or teenager the space to make mistakes with their money, Wang said. Yet, 65 percent of parents admitted it’s hard for them to take a step back and allow their kids to make money mistakes, Wells Fargo found.
Frame budgeting as a positive
For cash-strapped families living paycheck to paycheck, a budget can feel like another stressor amid an already stressful situation. For those who enjoy a significant gap between how much they earn and spend, budgeting can feel unnecessary.
But when you teach your kids to budget, emphasize that budgets are a way to achieve your goals, not limit them. In doing so, kids learn how to be conscientious about their money management.
“When teaching kids budgeting, frame it as something that helps people create a plan for their money, so they can reach their goals, instead of something restrictive,” Wang said. “That way, kids learn it isn’t about keeping yourself from spending at all costs, but prioritizing your money for different purposes and spending responsibly.”
Get them involved in the day-to-day
There are plenty of ways that parents can get their kids involved in day-to-day money decisions that impact the whole family. For example, schedule monthly family budgeting meetings where you can review the past month’s spending and make adjustments to your budget, said Stoy Hall, CEO of wealth management firm Black Mammoth. Additionally, make sure your kids have a budgeting app that you can review during these meetings.
“What we do is we have a monthly money family meeting, where we go through their [budgeting] app … and our family finances as it pertains to the budget,” Hall said in an email to The Independent. “We also include them in and show them the budget for things like travel or their sports. Doing it often makes them understand things take money and why certain decisions are made.”
Be smart about what information you share with your kids based on their age, Wang said. Going through family debt with younger children could be stressful for them.
“Young kids don’t need to hear about debt or stress, but they can help plan a gift budget for a sibling’s birthday or compare prices of new school shoes,” he said.
Value financial literacy
While parents often focus on their kids’ academic success and emotional maturity, financial literacy tends to get left out of the mix. However, it’s an important part of their development into financially responsible adults, Wang said.
“Teach lessons and build habits early, talk about your values and expectations often, model the behavior you want to see, and celebrate the wins while learning from the losses,” Wang said.
“Most of all, help kids see money as a tool, not a mystery or stressor. Because kids who grow up with that mindset become more confident money managers.”