Most Parents and Grandparents Think Today’s Kids Are Less Prepared to Manage Money. Here’s What to Do About It.

Most parents and grandparents want the same thing: to give the next generation opportunities they may not have had themselves. In many ways, families have never had more tools available to help make that happen. Yet many wonder, “Am I doing enough?” If that’s a question you’ve asked yourself, you’re in good company. 

More than half of parents and grandparents (53%) believe today’s children are less prepared for money management than they were at the same age, according to a new survey from Wealth Enhancement.

At first glance, those findings might not seem to add up. Today’s children have access to more financial information than previous generations could have imagined. But most parents and grandparents know that financial confidence isn’t built by downloading an app. It’s built through experience, conversations, and the values we pass along over time.

That may sound like a big responsibility, but it doesn’t have to be. Helping children develop healthy financial habits often starts with small, everyday moments rather than grand (or formal) financial lessons. The important thing isn’t doing everything perfectly. It’s finding simple ways to make money a topic that feels approachable, practical and worth talking about.

Acknowledge today’s financial world

One thing I’ve noticed as both a financial planner and a parent is that children experience money very differently from the way many of us did growing up. My five-year-old son has watched me tap my card to pay for groceries, swipe my card to make purchases, and fill a Costco cart without ever exchanging cash. Outside of the occasional dollar left by the Tooth Fairy, he has had very little reason to think about money as something tangible.

That isn’t necessarily a problem, but it is different. Many of us grew up counting coins, saving cash in a piggy bank or watching money physically change hands. Today, much of that happens behind the scenes. As a result, some of the money lessons previous generations absorbed naturally may require a little more intention.

At the same time, instant gratification has become part of everyday life. We can have almost anything delivered to our doorstep in a matter of hours. Even as adults, many of us aren’t immune to the influence of social media, targeted advertising and one-click purchasing (I’m looking at you TikTok Shop!). 

Perhaps that’s why 56% of parents and grandparents in Wealth Enhancement’s survey said that avoiding impulse purchases and overspending is the hardest money lesson to teach.

Make Room for Regular Money Lessons

Most personal finance education doesn’t happen through formal lessons. It happens in the everyday moments. I’ve found that some of the most meaningful lessons happen during ordinary family activities. When my family goes to the thrift store, my son gets a set dollar amount to spend. That’s his budget. He can buy one larger item, several smaller ones or decide not to spend it all. The amount isn’t really the point. The lesson is learning how to make choices and think about tradeoffs.

If there’s something he wants that’s outside his budget, we don’t turn it into a lecture. We simply acknowledge that it’s hard when there’s something you want and can’t have right away. If it’s something he still wants later, we might add it to a birthday or holiday wish list. These moments may seem small, but they’re often where the most meaningful money lessons happen.

Allowances can create similar opportunities. Our survey found that 63% of parents and grandparents give or gave their children an allowance, with most starting around age eight. The age and amount matter far less than the conversations and experiences that come with it.

Children learn a great deal when they’re given the chance to make real decisions with their own money. There’s a unique sense of ownership that comes from deciding whether to spend, save, or wait.

As children get older, those lessons can evolve. You might introduce investing by having them follow a company they recognize and watch how its stock price changes over time. The goal isn’t to create the next investing expert. It’s simply to help them connect the idea of ownership, growth, and long-term thinking.

What works for one child may not work for another. Rather than searching for the perfect system, look for opportunities that fit your child’s personality, interests and stage of development.

Most importantly, use these moments to pass along the values that matter most to your family. The lessons children learn about spending, saving, generosity, and the relationship between work and reward often come from what they see us do every day.

Don’t Overlook Your Own Financial Foundation

More than half (53%) of parents and grandparents surveyed said they have never opened an investment account for a child. Investing can be one of the most powerful ways to help children build a financial foundation for the future. The earlier money is invested, the more time it has to grow.

When a parent asks me where to start, my answer is usually, “It depends on what you’re hoping the money will do.” A 529 plan, custodial account or a Roth IRA can all be effective tools, but the right choice depends on your family’s goals and circumstances.

If you haven’t opened an investment account for your child, you’re certainly not alone. Many families are balancing competing priorities, whether that’s childcare, paying down debt, building an emergency fund, or simply figuring out where to begin. Before focusing on investing for the next generation’s future, make sure your own financial foundation is secure. If your retirement savings aren’t where you’d like them to be, start there. Your children can borrow for college, but there are no loans available for retirement.

Once your own future is on solid footing, you can decide how investing for your children and/or grandchildren fits within your family’s goals and resources.

Make Money Conversations a Part of Everyday Life

Financial education doesn’t just come from what we teach children about money. It also comes from the way we talk about money in our homes. Think about your earliest money memory. Maybe it was receiving money in a birthday card or overhearing a conversation about household bills. Those experiences helped shape the way you think about money today.

The same is true for our children. The way we talk about financial decisions, priorities, and tradeoffs influences how they think about money in the future. Treat money as something that can be discussed openly rather than something that’s off-limits. Talk about savings goals, explain financial choices, and answer questions honestly (in age-appropriate ways). Those conversations don’t need to be formal, and they certainly don’t need to be perfect.

Most importantly, remember that your children and grandchildren are watching. Long after today’s apps and platforms have been replaced by something new, they’ll remember the habits, values, and attitudes toward money they learned from the people around them.

Technology can be a useful tool, but it can’t replace the influence of a trusted adult. We have an opportunity to be the guide that some of us may not have had ourselves. And that’s one of the most meaningful ways we can help the next generation build a stronger financial future.

Article originally published by Kiplinger.

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