Financial Planning
March 29, 2023

Thought Leadership: Teaching Kids About Money

America is drowning in debt, and even six-figure earners are living paycheck to paycheck. Good or bad, financial habits start young: It’s imperative to teach our children financial literacy.
Stewart Willis

Compared to recent years, the past twelve months have been rocky for our finances. We enjoyed over a decade of solid market gains and low interest rates in which, as I’ve said before, even a blind chicken could have made money.

Seemingly overnight, we went from that environment to one in which inflation surged, interest rates climbed, the markets became more volatile, and Americans recently woke up to the news of three bank failures inside of just one week!

It’s not only harder to make money today, it’s harder to stretch the money you do make. Financial literacy has never been more important, but a national survey determined that America’s teenagers score, on average, just 64% on the National Financial Literacy Test. That’s not a promising statistic for people on the cusp of beginning their financial lives!

More states have begun mandating financial education in school, which is a great start, but it’s prudent to understand what that financial education entails so you can fill in any gaps in the curriculum. I got to experience this first-hand when my eldest son graduated from high school and began studying for a financial advisory license test. 

He’d made straight A’s in economics, but learned he had a significant knowledge gap in basic financial concepts such as the fact that stocks pay dividends. These ideas simply weren’t taught, which is why I’ll step in and supplement financial education for my younger child!

When your child enters their teenage years, that’s an ideal time to begin seriously preparing them for adult finances.

The first important lesson to get across is that we all have financial habits, and we also have agency in deciding whether to adopt good habits or bad habits. In other words, saving is a habit, and so is overspending. 

This can be a difficult topic to guide your teenager through, because teens are often very peer-conscious. If their friends have $200 sneakers, they want $200 sneakers too! This is where as a parent you feel pressure to give them the shoes, but from a financial education standpoint, it’s better to give your teen the tools with which to earn those shoes.

As a kid, my parents never simply gave me money. If I wanted money, I had to work for it by hauling brush for my dad’s tree service. I won’t pretend that at the time I didn’t wish I was just given the money! However, the high work ethic my parents instilled in me has fostered my financial success as an adult. You don’t have to own your own business; simply tying chores to income instead of just giving an allowance is a great start to teaching your teen about financial management.

Once your kid is making money, it’s important they know what to do with it. Get the kids involved with the family finances. If you have a 401(k) through your employer, make the management of that account a family event!

When you’re making decisions about your 401(k), explain what you’re doing to your teen. Seek the teen’s input. You don’t have to take their advice, of course, but having them tell you what they’d do and then talking through why that is or isn’t a good idea can be very instructive.

Make sure your teen understands that you’re intentionally putting that money away for the future instead of spending it now, and tell them why it’s so important to do so. That sounds like an obvious thing to say, but statistics show nearly one-third of workers in Gen Z are not saving anything for retirement. That’s a financial decision they will likely come to regret as they reach retirement age!

Demonstrate good habits. We live in a world of amazing convenience. With a few taps on a smartphone, you can make almost anything from dinner all the way up to a new car appear at your front door. 

But that convenience comes at a price. When things are easy to buy, it’s easy to fall into the habit of buying things you don’t need. We also live in a fast-paced society; if we can’t break away from work to go home and make dinner, it’s easy to tell our kids to order dinner from a delivery service. 

But our kids are learning from these actions, and if they become habits for you, they’ll become habits for your kids as well, which can lead to budgeting problems when they eventually move out on their own.

Financial literacy can stand between your child and their financial freedom. Making sure they enter adulthood with the proper financial knowledge is extremely important to their overall financial well-being.

At Asset Preservation Wealth & Tax, we’re immersed in finance every day. That’s a standard that would be hard for most people to meet unless they make finance their profession as we do. But having a working knowledge of financial concepts is something that’s attainable for everyone, and a valuable thing to instill in your children as early as possible.

Stewart Willis is the founder and president of Asset Preservation Wealth & Tax, a financial planning firm in Phoenix, Arizona. Investment advisory services offered through Foundations Investment Advisors, LLC, an SEC registered investment adviser.

The commentary on this blog reflects the personal opinions, viewpoints and analyses of the author, Stewart Willis, providing such comments, and should not be regarded as a description of advisory services provided by Foundations Investment Advisors, LLC (“Foundations”), an SEC registered investment adviser or performance returns of any Foundations client. The views reflected in the commentary are subject to change at any time without notice. Nothing on this website constitutes investment, legal or tax advice, performance data or any recommendation that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person. Personal investment advice can only be rendered after the engagement of Foundations for services, execution of required documentation, including receipt of required disclosures. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. Foundations manages its clients’ accounts using a variety of investment techniques and strategies, which are not necessarily discussed in the commentary. Any statistical data or information obtained from or prepared by third party sources that Foundations deems reliable but in no way does Foundations guarantee the accuracy or completeness. Investments in securities involve the risk of loss. Any past performance is no guarantee of future results. Advisory services are only offered to clients or prospective clients where Foundations and its advisors are properly licensed or exempted. For more information, please go to and search by our firm name or by our CRD # 175083.

Ready To Get Started?

You spent all your working years accumulating this wealth. Now it’s the time to make the most of it.