So many parents want to raise kids who are good with money. But the way most of us learned money ourselves was wrapped in fear, secrecy, restriction, or shame, and it is hard to teach a kid something you were never actually taught cleanly yourself.
Today’s teens are growing up in an even more complicated financial world than the one we learned in. Apple Pay, subscriptions, gaming currencies, buy now pay later, in app purchases, creator platforms, and credit that often feels invisible rather than physical. None of us got a manual for this version of money, let alone one for teaching it to someone else.
That is why I invited Dana Miranda into this conversation. Dana is the founder of Healthy Rich, where she writes about money, work, and shame free financial education, and her work has genuinely changed how I think about some of the advice I grew up assuming was just correct. She is also the author of You Don’t Need a Budget.
What follows is our full conversation on what it actually means to raise financially capable teens without passing down fear, control, or a bunch of outdated money rules neither of us ever chose in the first place.
What does good with money actually mean, and what should it not mean
A lot of parents want to raise kids who are good with money. What does that phrase mean to you? What do you think it should not mean?
When I hear “good with money,” I think of what it means to most people in our culture — knowing how to earn a lot and to hold onto what you have. When people tell me they’re not good with money, they usually mean they don’t know how to be rich. This definition of what it means to be good with money comes from the roots of budget culture, our typical approach to money that’s rooted in restriction, shame and greed.
To me, being good with money means being able to use money to support the life you want without worrying about it or letting it call the shots.
Being good with money shouldn’t mean having the discipline to deny yourself what you want or need. It shouldn’t mean possessing some special skills that other people don’t have. And it shouldn’t mean accumulating as much wealth as you can above other goals. These are the skills we teach when we teach personal finance through a budget culture lens. We train kids to restrict and go without; we train them to feel guilty when they don’t work hard enough; we train them that the most responsible thing they can do is accumulate money.
How fear, secrecy, and shame get passed down without anyone meaning to
Many adults have learned money through fear, restriction, secrecy, or shame. How do those lessons show up when we become parents?
I suspect fear drives a lot of what parents teach their kids. With the best of intentions, parents fear for their kids’ suffering, so they teach them what they think will keep them safe, happy and comfortable. But approaching money from a place of fear — usually, fear of scarcity — teaches kids to avoid curiosity, adventure and risks that could help them discover the life they want to live.
Secrecy and shame push a lot of parents to avoid talking to their kids about money or about the family’s financial situation. But even if you don’t talk about it directly, kids are good at picking up on your stress, fears and anxiety, and they’ll fill in the gaps if you don’t. Teaching kids that money is something to keep secret leads to all kinds of harmful habits in adulthood: They won’t know how to address financial challenges or feel comfortable asking for help. They won’t talk about pay with coworkers or friends, which obscures discrimination and unfair practices. They’ll believe the story that they’re “bad with money” and avoid valuable education that could empower them.
What budget culture actually teaches kids, without anyone saying it out loud
You have written about budget culture. How does budget culture affect the way families talk about money?
Budget culture lays a foundation of restriction, shame and greed under our collective and individual relationships with money. It’s woven into most interactions with money, including the way families talk about it and engage with it.
Kids tend to learn money management is first and foremost about being able to not buy something they want and instead hoard their money. Kids learn that “sharing” means lending their possessions out to siblings, cousins or friends on restrictive terms, rather than enjoying resources collectively. From parents’ reluctance to openly talk about salaries, debt and spending, they learn that money is an individual concern, rather than a societal one.
This is all driven by the way parents were taught to engage with money in budget culture, and it feeds the future of budget culture. Kids grow up to become adults, workers and parents who continue this cycle of approaching money from a place of restriction, shame and greed, and it remains normalized.
Teaching responsibility without guilt, fear, or control
How can parents teach responsibility without making kids feel guilty, scared, or controlled around money?
Responsibility can look more like empowerment than culpability. Rather than emphasize restriction or punishment to direct kids’ behavior around money, consider how you can arm them with the tools they need to make decisions that are satisfying and healthy for them. A big part of that is simply being open and honest about your family’s day-to-day financial situation, so they don’t feel like money should be feared or hidden.
You can also empower kids to think about money differently by focusing on what they want to achieve ahead of the money. For example, teaching kids about money often starts with creating buckets for cash — spending, saving and giving. That’s useful, but it’s also a money-first approach. You teach kids to look at the money they have in those jars and then decide the actions they’ll take, letting money dictate the life they live. You can instead ask them what they want to do (like, “What’s something fun you want to do this summer?”), then help them plan how money can support that. Rather than saying, “Well, you don’t have enough saved for that, how about this other thing..?” try saying, “OK, you already have $XX saved, which gets you halfway there. What resources do you have to get you all the way there?” Then help them earn or save more money, find ways to cut costs, etc. By starting with the life they want to live first, and approaching the goal as if it’s figureoutable, you can teach kids that money is a tool available to support the life they want, rather than a weight that restricts their possibilities.
What parents should understand about invisible digital spending
Teens now spend in a world of invisible money. Apple Pay, subscriptions, in app purchases, buy now pay later, gaming currencies, and algorithmic shopping is how they see, spend, and understand money. What should parents understand about that shift?
Technology is such a challenge, because parents are always needing to train kids to live in a world that’s a little foreign to them! But I think you can use the same basic approach with digital spending as with any other spending: The key is awareness. I don’t encourage restrictive budgeting where you set spending limits and track every dollar. But I do encourage creating a money map, which helps you see what you’re working with.
This is really helpful in two ways in the world of “invisible money.” First, it helps make some of that spending visible: Name your regular financial commitments, including app subscriptions that take money out of your account every month. Getting those charges out of the ether and into a single worksheet or spreadsheet makes them visible. Second, the purpose of a money map is to help you plan for those big financial commitments, so your day-to-day spending comes from a yes fund — money you can spend without worry. You can use a money map to set aside money in a dedicated account to pay for bills and another to save for goals. Knowing that money is automatically set aside every month, you can spend freely from what’s left without restriction. If kids want to avoid accumulating debt from invisible spending, they can limit themselves to a debt card that’s connected to their yes fund checking account; as long as there’s money in that account, they don’t have to worry about the purchases they’re making.
There are other ways you can help teens and young adults gain more awareness and control around spending, too. I wrote about this recently concerning DoorDash spending. Money management and banking apps let you use technology to combat the chaos of invisible spending and make money more tangible, too.
A healthier response to a money mistake than lecturing or punishment
If a teen spends impulsively or makes a money mistake, what is a healthier response than lecturing or punishment?
This is a tough question for me to answer, because I don’t see money moves as errors that need to be corrected. That certainly leaves punishment off the table, but it also means you don’t have to find a more positive way to convince your teen to make different financial decisions, either.
If, for example, a teenager was working and saving money to buy an outfit for prom, and they realize a week before prom that they’ve unwittingly spent all their money on in-game purchases and they have just $15 in their bank account… they don’t need to learn they’ve done something “wrong.” They didn’t. They just made choices. Instead of trying to impart a lesson that’ll prevent those choices in the future, accept the reality they’re in, and help them look forward with optimism. “You have $15 and you want to go to prom. How do you want to approach this?” As they’re learning, you can help supply some of their options — but let them name the goal first. If one of the goals they name is avoiding this situation in the future, help them make a plan to protect their savings goals from now on. If it’s not, that’s fine, too. Some people are impulsive spenders, and you can’t change that personality trait with brute force. You can help kids more by helping them learn how to live with it without constant shame and disappointment.
Other “money mistakes” might have to do with butting up against our financial systems, like not filing their tax returns on time or over drafting their checking account. Instead of treating those as irresponsible money management, treat them as the pitfalls of navigating complex systems. Help them learn options for paying taxes, so they understand the system and aren’t afraid of it. Help them search for bank accounts that block overdrafts and prevent the fees.
Overall, think about how you can help kids see money as something they can figure out, rather than something scary they have to be vigilant about.
The one money conversation Dana wishes more parents had
What is one money conversation you wish more parents had with their teens?
I’d like to see parents early on framing debt as a resource rather than a burden to be avoided at all costs. You can teach kids (or learn alongside them!) about how various debt products work so they’re empowered to use loans and credit cards as a resource.
So often, debt is something we think we’re supposed to avoid, but almost no one can live in this society without using it, so it becomes a burden we carry in shame and try desperately to get rid of it at all costs. Reframe debt as a resource you can use and manage as you see fit, and kids can learn to have a peaceful, balanced relationship with these products in their adulthood.
The one small step to take this week
What is one small step a parent can take this week to create a healthier money culture at home?
Talk about it! Be open about financial wins and challenges in your household, so kids get comfortable hearing money talk. This can be as simple as telling your kids how much money you make or letting them hear you openly discuss your salary with another adult. Even if they’re really young and that number doesn’t mean anything to them yet, hearing you discuss it openly helps normalize talking about money, so they won’t attach shame and secrecy to the topic.
More from Dana Miranda
And finally, where can readers find you and Healthy Rich?
Read my Healthy Rich newsletter
(or find Healthy Rich on Substack), and learn more about my book, You Don’t Need a Budget at https://www.youdontneedabudget.com/
Which one of Dana’s answers changed how you think about a conversation you have already had, or one you have been avoiding. Reply and tell us, Dana may see it too.
Thanks for having me! This is such a tough subject and so important!
So extremely true. I feel most parents never sit down to have this tough conversation with their children, leaving kids clueless on how to manage their finances when they enter the real world. This is far far too necessary nowadays.