How to Teach Your Kids About Finances and Debt Relief

Talking about money with kids isn’t always easy. I used to think they were too young to get it or that it wasn’t something they needed to worry about just yet. But I was wrong. The truth is, kids pick up on how we handle money even when we’re not saying a word.

They see how we spend, how we save, and even how we react when things get tight. That’s why starting early and being open matters more than we think. When kids grow up with a healthy understanding of money, they’re better prepared for the real world. They learn how to budget, how to save, and how to think twice before going into debt.

I can honestly say I wish someone had explained all of that to me when I was young. It would have saved me a lot of stress later in life. I’ve made a point to talk with my kids about finances now, not later. The goal isn’t to make them worry. It’s to help them build confidence and learn how to make good decisions. I don’t need them to become financial experts overnight. I just want them to understand the basics and feel comfortable talking about money when they have questions.

Start With the Basics

You don’t need to give your kids a crash course in investing or credit scores on day one. I began by explaining how money is earned. I told them that we work to earn money, and that money is used to buy things we need like food and clothes, and things we want like toys or treats. That simple idea helped them understand why budgeting even matters.

One of the easiest ways to start is by introducing saving. A piggy bank or a clear jar works great. When they can actually see their money grow, it’s more exciting. I remember one day my daughter wanted a specific toy. Instead of buying it right away, I told her how much it cost and helped her figure out how long it would take to save for it. Watching her reach that goal made the lesson stick so much better than any lecture would have.

Remember: start small, and continue the conversation as they grow.

Make Spending a Learning Experience

Spending money is something kids love to do, and it’s the perfect teaching opportunity. When we go to the store, I try to involve them in little choices. We’ll look at two similar items and compare prices. I’ll ask them what they think is the better deal and why. It’s simple, but it gets them thinking.

I also give them small amounts of their own money to spend. It doesn’t have to be a lot. A few dollars here and there is enough to let them experience the feeling of spending and, sometimes, the regret that comes with it. If they spend all their money on a cheap toy that breaks the next day, they learn a valuable lesson. And it’s better they learn that now than when they’re dealing with bigger purchases later in life.

Talk About Debt in a Way They Can Understand

Debt can feel like a heavy topic, but it doesn’t have to be scary or complicated. I like to keep it simple. I once explained it to my son like this: “If you borrow five dollars from me today, you have to pay me back later. Sometimes, you even have to pay extra for borrowing.” That made sense to him.

As they get older, I’ve introduced the idea of credit cards and interest. I told them that using a credit card is kind of like borrowing money from the bank. If you don’t pay it back right away, they charge you more. I didn’t dive into percentages or credit reports right away. I just wanted them to get the concept.

Sometimes we’ll even do pretend scenarios at home. I’ll be the “bank,” and they’ll come to me to borrow money for a pretend item. Then we talk about what it means to pay it back over time and what happens if they don’t. Making it a game keeps things light, but the lesson still gets through.

Be the Example They Watch

When I was going through a debt relief program, I decided to let them in on part of the journey. I didn’t tell them everything, but I did explain that I was getting help to pay off what I owed. I told them it was a smart move because it helped us save money and reduce stress. Seeing me take control of my finances showed them that it’s okay to ask for help and that being responsible is something to be proud of.

It could also be a good exercise to teach them to look through both the good and bad reviews, to get a better understanding of something before jumping in with both feet.  For example, I considered working with the company American Debt Relief when I was in debt, and did an in-depth look at American Debt Relief’s reviews so I could have more confidence in my decision. I explained to my kids what I was looking for when reading the reviews (in kid-friendly terms), and ultimately why it wasn’t the right choice for me.

At the end of the day, the most powerful way to teach your kids about money is by showing them. Kids watch what we do even more than they listen to what we say. If I want them to understand the value of saving, I make sure I’m saving too. If I want them to avoid debt, I try to be mindful about how I use credit.

Be Honest About Hard Times

If your family has ever faced financial struggles, it’s okay to talk about that too. I used to think I had to protect my kids from those details. But when I finally opened up a bit, I realized it helped them understand that money isn’t always simple, even for adults.

You don’t have to go into every detail. Just explaining that sometimes grown-ups need help with money is enough. I once told my kids that we were working with someone to help us manage our money better. I explained that there are programs designed to help people who are dealing with debt. That conversation made them feel included and took away some of the fear around the word “debt.”

Use Fun Tools and Activities

There are so many fun ways to teach kids about money that don’t feel like lessons. One of my favorites is board games that involve money. Games like Monopoly or The Game of Life are great for introducing the concepts of earning, spending, and budgeting.

There are also apps and videos created just for kids that explain financial topics in fun and engaging ways. If you have younger kids, even basic chore charts can help. I give my kids a small allowance for certain tasks around the house. They can choose to save it, spend it, or give it. We’ve even started setting savings goals together. When they hit a goal, we celebrate. It turns financial responsibility into something positive.

Keep the Conversation Going

Talking about money with your kids shouldn’t be a one-time thing. It’s better to keep the conversation going over time. I try to bring it up naturally during our day. If we’re out shopping, if a bill comes in the mail, or if they ask about something they want to buy, I use it as a moment to teach.

The more you talk about money, the more comfortable your kids will be talking about it too. That comfort can carry over into adulthood, helping them avoid common financial mistakes and feel more in control of their lives.

Final Thoughts

You don’t have to be a money expert to teach your kids about finances. You just need to be honest, open, and willing to learn together. I’ve made plenty of mistakes, and I’ve shared some of them with my kids. They know that managing money takes practice and that no one gets it right all the time.

What matters most is starting the conversation. Teach them to save, to think before spending, and to understand what debt really means. Help them see that asking for help with money is a sign of strength, not weakness. Those lessons will stick with them longer than you think.

And if you ever feel unsure about how to explain something, remember this: just showing your kids that you care about making smart money choices is one of the best lessons you can give.