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Talk is Cheap: How Parents Shape Their Kids' Money Skills 

In a recent article, Dr. Ashley LeBaron-Black and colleagues[1] explored the association between parental financial education during a child's upbringing and the financial wellbeing of those children as they transition into emerging adulthood.   

a house made from 100 dollar bills

Dr. LeBaron-Black delved into the ways parents teach their children about money and how these methods impact the financial well-being of emerging adults. The study examined three primary approaches parents used: (1) demonstrating money management, (2) discussing money-related topics, and (3) providing practical money experiences. The researchers assessed the financial wellbeing of emerging adults aged 18 to 30 in the United States, and considered factors like financial stress, financial satisfaction, and financial independence. Additionally, the study explored whether the financial confidence and money habits of emerging adults were influenced by the ways their parents taught them about money, and whether financial confidence and money habits impacted their financial wellbeing.   

The study found that parents can influence their children's financial wellbeing in various ways. Parents modeling good financial behaviors and providing their children with hands-on experience with money was more beneficial than just having financial discussions with children. If parents are models of good financial behaviors for children to learn from, when the children are emerging adults they have healthier financial habits and thus better financial wellbeing. As parents give their children hands-on learning experiences with money, it can help children feel more capable about money management, and this financial confidence then leads to better financial wellbeing. So, parents can improve their own money habits and create practical money experiences for their children. 


1.     Nurture Financial Wellbeing.

During the formative years, parents play a crucial role in shaping their children’s financial behaviors. The lessons you impart significantly influence their financial knowledge and decision-making, impacting their future financial wellbeing. Extend your guidance beyond these early years by providing continuing financial education. Empower your children to manage money confidently. Your guidance stands as a crucial factor in enhancing their financial confidence and wellbeing throughout their life.[2] 

2.     Become a Positive Money Role Model.

As a parent, your financial habits greatly impact your children's future financial satisfaction and independence. By sharing your positive financial behaviors, you can inspire your children to make wise financial choices, resulting in greater financial satisfaction and a more optimistic outlook for your children.[3] As you learn how to instill these habits early on, you can foster a more secure financial foundation for your children.[4] Some ways in which you can do so might include having open conversations with your children about your own money management and by exemplifying healthy behaviors like budgeting and saving.  

3.     Facilitate Hands-on Financial Experiences.

small plant growing out of a pile of change

Encourage hands-on experiences for your children, such as involving them in financial decisions or helping them open their own savings accounts. These practical experiences impart essential financial skills, fostering their financial wellbeing. Through these activities, children not only learn the value of money but also develop a sense of responsibility and lifelong financial habits. 


Dr. LeBaron-Black's research emphasizes the vital role parents play in shaping their children's financial future. Parents significantly influence their children's financial wellbeing by modeling good behavior and providing real-life money experiences, fostering healthy financial habits and confidence in money management. In contrast, mere discussions about money without a good example and practical experience do not yield the same benefits. In summary, parents empower their children's financial future by improving habits and offering hands-on experiences.[5]


[1] LeBaron-Black, A. B., Curran, M. A., Hill, E. J., Toomey, R. B., Speirs, K. E., & Freeh, M. E. (2023). Talk is cheap: Parent financial socialization and emerging adult financial well-being. Family Relations, 72(3), 1201-1219.
[2] LeBaron, A. B., Runyan, S. Jorgensen, B. L., Marks, L. D., Li, X., & Hill, E. J. (2019). Practice makes perfect: Experiential learning as a method for financial socialization. Journal of Family Issues, 40(4), 435–463. 1177/0192513X18812917
[3] Serido, J., LeBaron, A. B., Li, L., Parrott, E., & Shim, S. (2020). The lengthening transition to adulthood: Financial parenting and recentering during the college-to-career transition. Journal of Family Issues, 41(9), 1626–1648.
[4] Allsop, D. B., Boyack, M. N., Hill, E. J., Loderup, C. L., & Timmons, J. E. (2021). When parenting pays off: Influences of parental financial socialization on children’s outcomes in emerging adulthood. Journal of Family and Economic Issues,42(3), 545–560. 
[5] McCormick, M. (2009). The effectiveness of youth financial education. Association for Financial Counseling and Planning Education, 20(1), 70–83.