CPA: These Are the Money Lessons Kids Need.

Somewhere between “when you have a job, you can buy whatever you want” and “you’ll never have to worry about money” are the money lessons every child needs to hear to build their own money skills.

As a certified public accountant, I’ve spent a career watching the end results of money silence. Every newly married, single, or widowed person who sits across from me, often middle-aged, is learning about debt, investing, wage negotiation, and taxes (of course, taxes) seemingly for the first time. It never ceases to blow me away.

I decided early on that my kids, now 17 and 18, would never be those adults.

Make their money make money

In my home, everything and everyone gets put to work, including any money in the bank.

My oldest started working at 14. As I watched her nest egg begin to accumulate, I knew I needed to find ways to invest the idle cash and grow it. Since she had no daily need for this cash, it made sense to ensure it would grow.

When I made a big move for her, she was skeptical about why I was “taking” her money. To explain, I did a simple illustration of the impact of compounding interest and high-yield savings account options. At 14, she had enough basic math knowledge to see the logic in the move. I made sure to follow up with semi-annual check-ins so she could see for herself how the compounding was at work. It wasn’t any sort of magic her CPA mom was pulling off, it was knowing where to keep your money.

When my son began working, the same conversation inevitably followed, and now they both understand the benefits of compounding and determining between cash to be held for regular use and savings that should be put to work.

Compounding is something I talk to adults about on a regular basis to support planning their income needs, a simple growth technique that, quite honestly, some just aren’t thinking about. I can never stress enough that even for the risk-averse, this is your move, not complex, and has little chance of risk.

All money topics should be on the table

Then, of course, there’s the conversation every parent is having with their teenage children: retirement.

Yes, retirement chats at 17 or 18 are important. Why? Once my kids started working and had earned income, the gateway opened up to them to access and make contributions toward retirement accounts. I know it sounds ridiculous, since they haven’t even started their careers. Believe me, I get looks when I say it, but the math is far from absurd.

Starting at 18, when the likelihood of having more discretionary income is greater, instead of waiting, say until your mid-20’s to start saving for later in life, gives you a solid 10-year head start, and again with compounding and growth, that window of time can help to make the difference between when and how you are able to retire.

I say this as a 46-year-old, planning to semi-retire at 50 and fully at 55. I started making these annual contributions at the age of 18 and rarely took a break. The key part of this discussion isn’t the pressure to fully fund their retirement early; it’s about the clock that has already begun to tick well before competing financial priorities inevitably enter their lives. I know their future selves will thank them (and me) for this.

Tax talks are important, too

There is no lesson I could ever give that hits as hard as getting your first real paycheck. Why? Your deductions become clear, and my kids might have let out an audible gasp, knowing they don’t get to eat the whole pie.

Why did I “lose” money, they wondered? This turned into an important conversation about access to medical and social benefits, and of course, withholding taxes. The key takeaway here being that the number on your job offer and the number you take home are never the same, and everyone, including teens, should plan accordingly.

Taxes are a very real part of life; learning at the age of 18 with a part-time job is less jarring than in your 20’s with a surprise tax bill you didn’t see coming. Taxes remain by far the largest black hole I see with the adults I work with.

Budgets need to be set

My son said something one day that gave me pause. “You seem to be doing well. Why don’t you just buy it?”

To him, it was a compliment, even encouraging. To me, it landed differently. He hadn’t seen the parts or times when I didn’t feel like I was doing well.

I explained to him that those moments existed. I talked about the planning, and that budgeting was very real throughout his whole life. There were educational plans that began the day they were born, the gravity of carrying the load of property they would inherit. All of it was real and remains present.

What I have always made sure of is that they know that the steadiness my kids feel in our home wasn’t luck, it was hard work and planning on the part of their parents. It is the output of decisions made long before they were old enough to notice.

That’s probably the biggest money lesson; financial security only looks effortless on the outside and after years of proactive planning and consideration.

My kids are about to build their own financial lives; growth, investing, tax planning, all of it is theirs to manage. I know they will make mistakes, as did I. But they won’t walk into adulthood believing that money is taboo to speak about or something magical outside of their control.

In our house, money talk is never taboo, and I hope that one day, at their own kitchen tables, it won’t be either.