The Shocking Reason Why Parents Should Talk to Their Kids About Money

Is money “off limits” in your home? It shouldn’t be.

Should Parents Talk to Their Kids About Money?

Money is a sensitive topic for many families. But according to recent research by North Carolina State University, parents need to get over it.

Children are perceptive about family financial issues, the study found, and they draw conclusions whether parents want them to or not. Parents might think they’re insulating their kids from topics they consider too “adult,” but actually they’re just failing to teach them the financial knowledge that will prepare them for real-world money management. More direct communication, in contrast, will likely help youngsters learn the right lessons.

“The takeaway here is that even young kids are aware of financial issues, regardless of whether parents talk with them about money,” Dr. Lynsey Romo, lead author of the research, said in a press release. “And if parents aren’t talking with their kids about subjects like family finances or debt, the kids are drawing their own conclusions – which may not be accurate. Even if parents don’t want to discuss family finances with their children, it may be worthwhile to explain why they don’t want to discuss that topic.”

What Parents Do and Don’t Talk About

Unlike previous research, the North Carolina State study focused on families with young children. Researchers interviewed 136 kids between the ages of eight and 17, with an average age of 10.5.

“We wanted to know what kids are learning, or not learning, about money from their parents,” Romo said. “This is one of the first studies to look at what young school-age children know about money. The only other studies we’ve seen that address this issue focused on some high school and mostly college students.”

The research revealed that certain financial topics were more commonly discussed than others.

“Broadly speaking, we found that parents were most likely to talk with their kids about saving, spending and earning,” Romo said.

Parents were forthcoming about these subjects, likely because they wanted to teach their kids good financial skills. (Financial literacy is a good thing.) However, many of the children noted that some topics were off-limits, most notably family finances, parental income, investments, and debt.

Family Finances are an Opportunity for Financial Literacy

For the most part, the children in the survey said they didn’t understand why their parents wouldn’t talk to them about family finances. Some kids believed it was because their parents didn’t want to scare them or have them brag to friends who might not be as well-off. But the children were nonetheless generally aware of their family’s finances. This suggests that as much as parents might want to avoid the topic, family finances are in many ways unavoidable, and an honest conversation about them gives parents the chance to clear up misperceptions and teach kids important lessons about personal finance.


Do you talk to your kids about money? Did your parents talk to you? Let us know on Twitter at @OppUniversity!