Teaching kids about money: What's the right age to start?

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When it comes to teaching your kids about money, it's never too early to start. Of course, their age will determine how detailed and complex those lessons should be.

Here's why you should start having conversations about money with your kids right away, and how to frame those discussions according to their age.

The benefits of teaching kids about money early

According to a recent survey by U.S. Bank and Morning Consult, about two-thirds of parents say they have already started or plan to start teaching basic money management concepts before their children turn 12.

"Today's parents are the first generation where a majority are choosing to have open conversations with their kids about money — and at an early age," said Arijit Roy, head of consumer and business banking products at U.S. Bank, in a statement.

For example, the survey found 62% of Gen Z respondents had these types of money conversations growing up, compared to less than half (49%) of baby boomers.

Studies have found that introducing the concept of money management early can help your child gain the knowledge and confidence to make more informed financial decisions later in life, as well as build more positive financial habits.

In fact, 39 states now require personal finance courses for high school graduation. And a Federal Reserve Bank of New York study found that those who received mandatory financial education in high school were more likely to make sound financial decisions as adults than those who didn't receive any education.

However, experts say it's important for parents to start these conversations at home and not leave the responsibility solely up to schools.

"Kids start forming an understanding of money and begin developing their own money habits far earlier than parents might realize," said Alaina Trivax, author of Follow the Money and founder of financial literacy platform Let's Make It Grow . "We already teach our kids values like kindness and respect, and about how to ride a bike and brush their teeth. Financial literacy skills belong on that same list."

What are some age-appropriate money lessons?

Helping your child learn about money doesn't necessarily mean sitting them down and conducting an official lesson. There are teachable moments in everyday life that parents can use as an opportunity to talk about money. And children as young as preschool age can grasp many of these concepts.

For example, in their younger years, you can start by explaining why parents go to work, how money is earned, and how that money helps the family afford everyday expenses. These initial conversations can then lead to further questions and discussions about budgeting, borrowing, investing, and more.

Parents can also involve young children in meal planning and grocery shopping, cluing them in to how money plays a role in their home and everyday life.

Trivax noted that children ages 8 to 11 are usually ready for more independence, which could involve earning a little money and deciding how to budget it. "Take them grocery shopping with you for a few easy lessons. Try handing them a name-brand and a store-brand cereal box, and point out their different prices," Trivax explained. "Ask your child why one might cost more, and if the difference seems worth it."

By middle school, Trivax added, kids can handle more complex concepts, such as opportunity cost. For example, spending $60 on a video game today might mean saying no to a concert ticket next month, she said. "As they head into high school and college, they'll need to know how to budget, save, and invest their money too."

The road to smart financial decisions starts at home. Parents have the opportunity to use everyday errands, purchases, and money choices as lessons that can shape a child's financial future — and they don't have to wait until their child can count coins and bills to start.

The earlier these conversations begin, the more time there is to build strong habits and decision-making skills that can serve as a foundation for a better financial future.

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