How to Teach Your Kids Financial Literacy (From a Certified Financial Planner)

As a young adult, Jamie Bosse took a reactive approach to handling her finances — simply responding to problems in real time. But her perspective changed after her family faced financial hardship early in her college career.

Wanting to strengthen her personal financial education, Bosse enrolled in Personal Finance 101 at Kansas State University. The class inspired her to become a Certified Financial Planner (CFP®) and help people improve their lives by taking a proactive approach to financial planning.

Today Bosse devotes her time to teaching financial literacy to kids and adults alike. When her oldest child was around four years old, Bosse noticed a lack of resources for talking to kids about money. To fill this void, she authored the children’s book series Milton the Money Savvy Pup.

Although financial literacy might seem like a daunting subject for children, Bosse explains that kids develop “money scripts”— the ways they think and talk about money and finances — surprisingly early. When she visits elementary classrooms to read her books, the kids already have stories to share about their personal experiences with money.

“They're often really excited to tell me about how they save money, and if they have a piggy bank or if they have jars that they put it in,” Bosse said. “They're excited to talk about money, the things they want to buy, and how to make a plan to save up for them.”

But the social stigma around talking about finances often limits these kinds of discussions, especially between parents and children. As a CFP®, Bosse finds that parents hesitate to talk to their kids about money, often because they feel unqualified. So unless financial literacy is being offered at school, the only way kids are learning about money is through observing their parents and friends and trial and error.

“The way we spend money and act around money has little to do with numbers or math or rational thinking, even,” Bosse said. “We handle money with emotions, and the way we think about money might be because of our experience in the past or even our parents’ experiences with money.”

Rather than relying on kids to passively absorb how to spend and save from the people around them, Bosse recommends parents set their children up for success by having intentional, open and honest conversations about the role of money in their daily lives.

“It can be as simple as when you're shopping together,” Bosse said. “Verbalize why you're choosing one item over another. Or if you have a budget for that shopping trip, bring them in on it.”

Bosse also suggests letting kids experience those tradeoffs themselves. By giving kids an allowance and taking them shopping, parents can make them aware of the types of decisions they will have to make.

“Your child might say, I want this Pokémon thing, and I want this remote-control car, but they can't have both,” Bosse said. “You want them to go through that internal struggle of, ‘What's worth it to me, and what do I want to prioritize?’ Just giving kids some practice with real-world money situations can be helpful.”

These low-stakes financial decisions allow kids to learn from their mistakes early on and before they might run into problems later in life, like affording rent and groceries or budgeting for an emergency.

Although skills like math are important for financial planners, Bosse emphasizes the importance of building relationships with her clients to better help them see the bigger picture.

“You have to establish trust with the client,” Bosse said. “You have to understand when they share their money stories with you or their salary, it's very vulnerable.”

According to Bosse, financial planners need to listen and understand their clients’ priorities and their attitudes toward money, then have conversations about what is needed to achieve their long-term goals.

“When it comes to doing the math, we have calculators and we have spreadsheets where the software will help you figure it out,” Bosse explained. “But if you can't understand why someone is behaving the way they are about money, you can't help them fix it, right?”

If you're looking to integrate financial literacy into your family or classroom, consider the following tips inspired by Bosse’s approach.

1. Start early: Introduce financial concepts to children at a young age. Use everyday activities like shopping to explain budgeting and decision-making.

2. Encourage open conversations: Talk openly about money with your children, including your own financial decisions when appropriate.

3. Make money tangible: Help kids understand that money is finite by showing them how you budget for a purchase and how much is leftover for something else.

4. Allow kids to make their own financial decisions: Provide opportunities for your children to make spending decisions with their allowance to teach prioritization and saving.

5. Focus on the big picture: Teach financial planning as a holistic process that includes budgeting for short- and long-term goals.

Integrating these proactive practices will improve your child’s financial literacy and help ensure a successful financial future.

Visit Jamie Bosse’s website to learn more about her books and her approach to teaching financial literacy.