Why Start Early?
Teaching our kids about money is one of the most important lessons we can impart—it's about building the foundation for generational wealth that can benefit their children and grandchildren. According to a 2024 survey by the National Financial Educators Council, respondents estimated that a lack of personal finance knowledge cost them an average of $1,015 over the year. But the real cost is missed opportunities to build lasting wealth that transforms families for generations.
Lessons from a Dad with a Front-Row Seat
As the father to an (extremely energetic!) 3-year-old, I'm still at the beginning of our teaching journey. While my day job as General Manager of PensionBee gives me insights into how Americans struggle with retirement planning, at home I'm just another dad trying to figure out how to explain money to a toddler who thinks every coin is a "treasure."
Research shows that children form money habits by age 7, according to Cambridge University. This means the financial behaviors we model now have a lasting impact on their relationship with money.
At PensionBee, I see smart, successful people who never learned basic wealth-building principles. They have scattered 401(k) accounts, pay unnecessary fees, and miss decades of compound growth. The average American changes jobs 12 times and often leaves behind 401(k)s with their old employers. If you think it can’t happen to you, there are 30 million forgotten 401(k) accounts holding $1.65 trillion from people who didn’t think it would happen to them.
As a dad, I'm determined my son won't face these challenges.
What I'm Learning as a Dad
Being a parent changes everything about how you think about money. Here's what I'm discovering:
The "Mine" Phase is a Teaching Opportunity: When my son declares everything "mine," I use it to introduce ownership concepts. "Yes, this is your toy, and Daddy's money helps us buy your toys. But we have to be smart about how we use our money."
Grocery Store Lessons: Every trip becomes a mini financial literacy class. "We need milk and bread—those are needs. The cookies are wants. We can get some wants, but we always take care of our needs first."
The Power of "Growing Money": I talk about our family's money as something that "grows" when we take care of it. When he sees me checking accounts, I explain: "Daddy is checking on our family's money to make sure it's growing big and strong, just like you!"
Teaching Generational Wealth by Age
Generational wealth is simply money, investments, and assets that families pass down to help future generations get ahead. Here's how to explain and teach it:
Preschool (Ages 3-5): Planting the Seeds
Explain it: "Generational wealth is like planting a money tree that keeps growing and can help our family for many, many years."
Activities:
- Use coins and bills in play—my son loves sorting coins by size
- Point out needs vs. wants when shopping
- Start a piggy bank and celebrate when it gets "heavier"
- Model good habits: "Daddy is taking care of our family's money responsibilities"
Elementary School (Ages 6-11): Building the Foundation
Explain it: "Families save and invest money so each generation starts with more advantages than the last."
Activities:
- Introduce allowance with the "pay yourself first" principle
- Use the three-jar system: saving, spending, giving
- Set savings goals and explain how money can "work for them"
- Share age-appropriate stories about building family wealth
