Every tap-to-pay transaction, $3 ATM fee, and cash-stuffed birthday card is an opportunity to prepare your child for the financial realities of adulthood. With October marking Financial Planning Month, financial education for teens and young adults is top of mind. The Root spoke with Crawford Mickey McGill, CEO of Houston-based Reveal Wealth Strategies, about how parents can share money lessons with kids of all ages. His top takeaway? Parents don’t need to have all the answers to start teaching—they just need to be willing to talk about it.
Break the Silence Around Household Finances
“We don’t talk about money” is a longstanding cultural rule of silence around discussing finances. McGill encourages families to break that pattern, even when they’ve made financial mistakes. “Your current situation doesn’t have to be your family’s future situation,” he said.
Those conversations are vital in Black households. According to a 2021 Census report, Black Americans held less than 5% of the country’s wealth, so parents can learn about finances alongside their children.
Show Young Children the Value of Money
Financial education can begin before children understand the difference between quarters and dimes. Lessons about sharing, gratitude, generosity and waiting for something you want can teach preschoolers core financial values.
Children can also learn from adults’ behaviors. McGill remembers his father tipping hotel housekeepers and stopping to help stranded drivers. “Kids emulate what they see, not always what they’re taught,” he said. As children grow, hands-on experience with money becomes increasingly important.
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Give School-Age Children Real-World Lessons
As children begin receiving birthday money or earning allowances, parents can help them practice saving and spending. McGill’s family rule was 50% to savings, 10% to tithing and 40% to spending. The split can vary, but building the habit is essential.
“Anything can be a lesson,” McGill said. When his daughter ran a lemonade stand, he charged her $3 for sugar, water and cups, introducing her to “cost of goods sold (COGS).”
Give Preteens and Teens Room to Practice Decision-Making and Build Credit
With preteens and teens, technology and bigger financial decisions come into play. Because tap-to-pay makes spending harder to see, show older children their account balance before and after a purchase. Digital banking tools like Greenlight or BusyKid can help, though McGill cautions they aren’t “set it and forget it.” Parents must regularly review spending and watch for fees.
As teens gain independence, parents can show them how credit works. McGill added his daughter as an authorized user on his card at 16 to help her build credit history and manage emergencies. He cautions parents to choose a card they pay on time and keep well below its limit, because late payments and high usage can hurt both credit scores.
Know that fraudulently opening credit in a child’s name is identity theft, not just a means to an end. “You are destroying their credit before they get a chance to even approach the world,” McGill warned.
Teach Teens How Money Grows
Once teens understand spending and credit, parents can introduce investing through a mock account. McGill recommends starting with a virtual $10,000 portfolio and having them invest in familiar companies, from sneaker brands to their favorite fast-food chains. Before each investment, have them research what the company does, how it makes money, why customers buy its products and its likelihood of long-term success.
Free online tools such as HowTheMarketWorks.com and the SIFMA Foundation’s The Stock Market Game let children practice with real market data. McGill recommends tracking the portfolio for at least six months so children experience market gains and losses. “The goal isn’t to teach kids how to pick stocks—it’s to teach them how to think like owners,” McGill said.
Prepare Young Adults for Financial Independence
When young adults earn their first paychecks, McGill urges them to save before taking on car and housing payments. If an employer offers a 401(k) match, he says to take advantage. If a 401(k) isn’t an option, alternatives like setting up automated payments to a high-yield savings account can help young adults build savings consistently.
Pass Down More Than Money
For McGill, wealth is about more than what one generation leaves the next. He calls it “transformational wealth” when people share what they’ve learned and help relatives and others gain the skills to pursue opportunities. Simply put, McGill said: “Each one teach one.”
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