More than half of parents find it difficult to talk about money in a way their children can understand, according to a 2025 study by Wells Fargo. The research highlights a common challenge: balancing control over children's spending with allowing them to make their own financial mistakes. Nevertheless, 87 per cent of parents agreed that monitoring their child's spending helps guide them towards better financial habits.
Victor Wang, chief executive of the family-focused investing platform Stockpile, emphasised the importance of parents becoming their children's first 'money influencer'. 'With money, as with any tough topic, when we stay silent, kids fill the gap with advice from friends or social media,' he said. Wang advised adapting the approach according to the child's age, starting with concrete methods for young children, such as letting them hand cash to a cashier or using a savings jar.
For elementary school children, Larissa Adamiec, a financial economist at Purdue University, suggested a weekly allowance of $10 to illustrate taxes and expenses. She recommended taking $1 or $2 for 'taxes', $2 for long-term savings, and $4 for short-term savings, leaving the remainder unrestricted. As children grow older, parents can introduce concepts like paying bills, investing, and the difference between debit and credit cards.
The study also found that 65 per cent of parents find it hard to let their children make money mistakes. However, Wang argued that giving tweens and teenagers the space to err is crucial. For families on tight budgets, teaching budgeting can feel stressful, but Wang stressed framing it as a way to achieve goals rather than as a restriction. 'That way, kids learn it isn't about keeping yourself from spending at all costs, but prioritising your money for different purposes and spending responsibly,' he said.
