As a first-generation wealth builder, you're learning financial skills that weren't passed down to you. The good news? You can pass them to your kids—and give them a massive head start.
"My parents never talked about money. I'm determined to do it differently. My 8-year-old now asks questions like 'Is that a need or a want?' It's working."
Why This Matters More for First-Gen Families
Kids from wealthy families absorb financial knowledge through osmosis:
- Dinner table conversations about investments
- Watching parents negotiate and invest
- Inheriting not just money, but financial literacy
Your kids won't have that advantage unless you create it. But you can—and it's not as hard as you think.
Ages 3-5: The Foundation
At this age, kids can understand:
- Money is exchanged for things
- You have to choose (can't buy everything)
- Waiting is sometimes necessary
Activities
| Activity | What It Teaches |
|---|---|
| Play store with real coins | Money has value |
| "This or that" choices | Trade-offs and decisions |
| Saving jar for small goal | Delayed gratification |
| Pointing out prices | Things cost different amounts |
Key Phrases to Use
- "We're choosing not to buy that today"
- "Let's save up for that"
- "That costs 5 dollars—that's a lot of coins!"
Pro Tip
Use "we're choosing not to" instead of "we can't afford it." This frames money as choices, not limitations.
Ages 6-10: Building Blocks
Now they can grasp:
- Earning money through work
- Saving for bigger goals
- The difference between needs and wants
- Basic concepts
The Three-Jar System
Set up three clear jars:
| Jar | Purpose | Suggested Split |
|---|---|---|
| Save | Future goals | 30% |
| Spend | Immediate wants | 50% |
| Give | Charity/helping others | 20% |
When they receive money (allowance, gifts, earnings), they divide it immediately.
Allowance Strategies
| Approach | Pros | Cons |
|---|---|---|
| Tied to chores | Teaches work = money | Can backfire (won't do unpaid tasks) |
| Unconditional | Teaches budgeting | Doesn't connect effort to income |
| Hybrid | Best of both | More complex |
Hybrid approach: Base allowance for being part of family + extra for above-and-beyond tasks.
Teaching
Use real examples:
- "If you save $10 and the bank adds 50 cents, now you have $10.50"
- "Next time, you earn money on $10.50!"
- Use a chart to show how it grows
Ages 11-14: Real-World Skills
Tweens can handle:
- Budgeting for activities
- Understanding income vs expenses
- Basic investing concepts
- Smart shopping and comparison
Give Them Real Responsibility
| Responsibility | What They Learn |
|---|---|
| Clothing budget for season | Prioritization, trade-offs |
| Entertainment budget | Planning, saying no |
| Saving for big purchase | Goal-setting, patience |
| Comparing prices online | Research, value assessment |
Introduce Investing Early
Open a custodial account and let them:
- Pick a company they know (Disney, Nike, Apple)
- Buy a few shares
- Watch it go up AND down
- Discuss why prices change
Pro Tip
Experiencing a stock drop teaches more than any lecture. Let them feel it (with small amounts).
Talk About Your Money
Age-appropriate transparency builds understanding:
- "Here's what our electric bill costs"
- "This is how much we save each month"
- "Here's why we're saying no to this vacation"
Ages 15-18: Preparing for Independence
Teens need to understand:
- Credit scores and how they work
- Bank accounts and debit cards
- The true cost of college
- First job money management
- Avoiding common scams
Essential Skills Before They Leave Home
| Skill | How to Teach |
|---|---|
| Opening a bank account | Take them to the bank |
| Reading a | Review their first pay stub together |
| Understanding credit | Get them an authorized user card |
| Basic cooking/shopping | Grocery budget challenge |
| Bill paying | Let them pay a household bill |
The Credit Building Head Start
Add them as an authorized user on your (you keep the card):
- They benefit from your payment history
- They start building credit before 18
- By college, they may qualify for their own card
College Conversations
Discuss honestly:
- What you can/will contribute
- Student loan implications
- Cheaper alternatives (community college, in-state)
- Whether the degree is worth the cost
Teaching Moments to Never Miss
When They Want Something Expensive
Don't just say no. Say:
- "That costs $X. How could you earn that?"
- "Let's figure out how long you'd need to save"
- "What would you give up to have that?"
When They Get Gift Money
Before they spend it:
- "Remember your three jars?"
- "What's your savings goal right now?"
- "Is there something you've been wanting?"
When You Make Financial Decisions
Narrate your thinking:
- "I'm comparing prices on these two options"
- "We're waiting for a sale on this"
- "I'm moving money to savings before we spend"
What NOT to Do
Avoid This
Hide all money stress — Kids sense it anyway. Age-appropriate honesty builds trust.
Avoid This
Buy everything they want — Struggle (within reason) builds financial muscles.
Avoid This
Use money as emotional manipulation — "If you loved me, you wouldn't ask for things."
Avoid This
Shame them for mistakes — Losing money on a bad purchase at 10 is cheap tuition.
Resources for Different Ages
| Age | Resources |
|---|---|
| 3-7 | "Rock, Brock, and the Savings Shock" book |
| 8-12 | Greenlight or GoHenry debit cards for kids |
| 13-17 | "The Simple Path to Wealth" (for teens) |
| All ages | Your own financial journey stories |
Going Further
For more family financial planning, our Building tier covers:
- Financial Planning for New Parents — Money decisions when kids arrive
- Helping Aging Parents with Finances — The other generation
- Money Conversations with Your Partner — Getting on the same page first
Quick Win
Start this week: If your kids are 6+, set up the three-jar system. If younger, play "store" with real coins. If teens, review their first paycheck together. One conversation starts the momentum.