From the Internet to social media and streaming, kids are accessing content much more readily than previous generations. This is true of financial information as well. Videos about investing, movies depicting financial decision-making and much more are accessible to children. For parents, this means it’s important to get ahead of any misleading or confusing information your kids may be exposed to. Additionally, many schools do not yet offer a curriculum around money management, leaving gaps parents have an opportunity to fill at home.

Before you dive into educating your children on all things personal finance, take some time to reflect on your own upbringing and early experiences with money. Thinking through your childhood memories can help you understand what drives your current habits and values surrounding money. More importantly, this exercise can help you decide what you want to pass onto your children and what you want to protect them from.

Below we’ll explore three practices that can assist your children in developing healthy money habits.

Communication

Normalizing conversations about money can be key to aiding your kids in fostering healthy relationships with money. If you have a partner, make sure to align on what this would look like in your household. Aim to lead to by example. This could be done through demonstrating openness around money by having conversations in front of your children about everyday topics like household spending, credit cards, taxes and more. Try not to shy away from discussing money mistakes or seeking financial advice. Witnessing this kind of transparency might help your kids feel comfortable asking questions and talking through money concerns as they get older.

Make it hands-on: Pick a movie, game, podcast or other form of entertainment to enjoy as a family that deals with money management. For example, there are  classic games such as the game of Life or Monopoly. Allot time after to talk about the concepts presented or lessons learned.

Budgeting

To empower your children to make their own spending decisions, they should first understand the value of money. One way to approach this is explaining how your family earns money. The numbers are not so important as the time and effort put into making money. You can equate this to their schoolwork and how the energy put into doing well in school will one day shift to a job. The lesson is that money is something that is usually earned as a result of work and must typically be replenished.

An easy way to begin fostering an understanding of budgeting is to offer a line of sight into how money is allotted and spent for the household. Answer questions like:

• What kind of budget categories do you have and why?
• Over what timeframe does the budget span?
• How do special things like vacations or birthdays fit in?
• Where does any leftover money go?

Having budget lists or charts that help your kids visualize how you track and evaluate household spending may help them grasp your thinking. This is also a good opportunity to emphasize distinguishing the difference between “wants” and “needs” as a key tool to good budgeting.

Make it hands-on: Let your child dip their toes into making household budgeting decisions. The next time you go to the grocery store, bring them along and allot them a small amount of money to spend. They can use it to choose one or multiple items for themselves. But also inform them that on subsequent trips (at whatever cadence works for your family), any leftover money will be added onto a new allotment of the same amount. So, if there is a bigger ticket item they are hoping for, this gives them the flexibility and autonomy to work up to it.

Investing

Similar to budgeting, your kids’ relationship with investing likely begins with what they observe from you. Investing can be a complex topic that involves risk, so it might be best to start small. Give your kids a sneak peek – through conversation or charts – of where some of your investments sit. Make sure you provide the “why.” For example:

• “These grow slower but usually have more stable growth over time”
• “These help me to diversify my assets”
• “These are in a sector that aligns with my values”

If you are a more passive investor, or if you have a younger child, focus on the range of investment accounts you have:

• “This is so I can stop working when I get older”
• “This is to help pay for college for you one day”
• “This is to put toward a new car in a few years”

Make it hands-on: If your child is grasping the concept of investing, create a learning experience for them that helps them to understand the thought and consideration that goes into investing decisions. Provide them with a pre-vetted list of investment products and allow them to do some research. For example, if using equities, have them choose a stock and present their findings that support the decision. Then, invest a small amount for them. You can sit down with them on a monthly basis to revisit the performance so they can see first-hand the possible outcomes of investing in the stock market.

It's important to remember that every family and child is different, so an approach that might work for one might not work for another. There is certainly no one-size-fits-all method to helping your kids build healthy money habits. Establishing guardrails may be valuable in giving your kids some financial autonomy without exposing them to unnecessary risks, scams, misinformation and other potential pitfalls. Lastly, as parents and humans, mistakes will probably happen. That’s okay! They can often present an opportunity to learn something – for both you and your child.

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This material is for informational purposes only, and may inform you of certain products and services offered by J.P. Morgan’s wealth management businesses, part of JPMorgan Chase & Co. (“JPM”). Products and services described, as well as associated fees, charges and interest rates, are subject to change in accordance with the applicable account agreements and may differ among geographic locations. Not all products and services are offered at all locations. If you are a person with a disability and need additional support accessing this material, please contact your J.P. Morgan team or email us at accessibility.support@jpmorgan.com for assistance. Please read all Important Information.