What We’re Teaching Our Kids About Money

Financially literate people tend to build more wealth, live happier lives and even have better health outcomes. So, it’s essential to teach your children financial literacy at a young age, setting them up for success as they enter into the “real world.”

Here at CNBC Select and CNBC Make It, we spend all day, every day reporting on money: what to do with it, how to spend it and where to put it. But what money lessons, if any, are we taking home to inspire an audience much different — our kids?

One of the most important lessons CNBC Make It Executive Editor Jenna Goudreau is teaching her five-year-old daughter is that money is a great tool, but not limitless, she tells CNBC Select.

“I take her to the store and let her spend her ‘budget’ of piggy bank money, so she can see firsthand that she has to make choices about what she can afford,” Goudreau says, adding that toddlers will learn they can’t get everything they want.

As kids get older, parents can introduce prepaid family debit cards like FamZoo and Greenlight that can help teach kids money management and financial literacy from a young age. With these cards, you can preload cash and digitally track what your kids are spending money on. Parents can set up savings goals and assign chores for an allowance through the apps, too.

Start by opening a 529 college savings account — a move that most of the journalists interviewed for this story made. These state-backed investment accounts allow you or your child to make tax-free withdrawals if the money is used on qualifying educational expenses, including college tuition, housing and books.

CNBC Select Editor Elizabeth Gravier opened two 529 accounts (one for each of her sons) both before their first birthdays.

States have their own 529 plan, but in many cases, you don’t have to live in the state to contribute to the plan. For example, New York’s 529 College Savings plan is open to any U.S. resident and contributors can put up to $520,000 into the account.

When your kids are older, you may want to introduce them to different types of investing. Teens can open a brokerage account as young as 13 years old. The Fidelity Youth^® Account is a great option, as there are no minimums or monthly fees. Once the parents open the account, the teen can learn how to invest firsthand by managing the account, along with their parents’ oversight.

CNBC Make It Senior Managing Producer Eric Clark says living within your means is one of the most underrated lessons of our time — and a value he’s instilling in his 19-year-old daughter.

“Especially in today’s social media–obsessed world, I think a lot of people see a lifestyle they admire online and will do whatever they can to mimic it in some way. Far too many are willing to go into debt just for likes,” Clark tells us.

Recent surveys indicate that members of Gen Z, in particular, face pressure to overspend due to social media: About 70% of Gen Z respondents in a recent Empower survey reported experiencing financial FOMO (fear of missing out) while scrolling through social media.

“I let my daughter know it’s perfectly okay to say ‘no’ if something doesn’t fit within her means or budget,” Clark says.

You can provide your teenage kids with guidance on how to spend by having them download a budgeting app like Rocket Money, which breaks down spending by category like dining and drinks, shopping, saving and entertainment, so your young adult can stay on track.

At CNBC Select, our mission is to deliver high-quality service journalism and comprehensive consumer advice to our readers, enabling them to make informed financial decisions. Every personal finance article is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of financial products. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content independently of our commercial team and any outside third parties, and we pride ourselves on maintaining high journalistic standards and ethics.

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