The Financial ABCs: Teaching Kids and Teens About Money

When I talk with clients about legacy, the conversation often starts with numbers—trust structures, 529 contributions, estate tax strategies. But very quickly, the discussion shifts to something deeper: What lessons will my kids and grandkids carry with them?

Because while leaving behind financial assets matters, the knowledge and perspective you instill can be even more powerful.

At BGM, we’ve seen firsthand how the succeeding generations flourish when wealth is paired with wisdom. That’s why I often encourage grandparents to see themselves not only as benefactors but as teachers. Passing down the “Financial ABCs” isn’t about turning grandchildren into mini accountants—it’s about giving them clarity around how money can serve them for life.

A Is for Awareness: Early Lessons (Ages 3–7)

Young children don’t naturally understand money. They see us tap a credit card or a phone, and it feels like magic. Grandparents can step in with simple, memorable lessons that make money awareness tangible:

• Use cash again. Handing over a dollar bill at the ice cream stand shows kids that things cost something real.
• Save, spend, give. Setting up three jars for saving, spending, and giving helps grandchildren learn early that money has different purposes. A grandparent’s birthday card “seed money” divided among the jars is a tradition that sticks.
• Wants vs. needs. A toy may be a want, but new shoes are a need. Helping kids recognize the difference is a building block for better decisions later.

At this stage, the goal isn’t mastery—it’s awareness. You’re giving your grandchildren their first vocabulary around money.

B Is for Basics: The First Steps Toward Independence (Ages 8–12)

Between the ages of 8 and 12, children are ready for more responsibility. This is a time when grandparents can quietly reinforce what parents may already be teaching:

• Allowance with intention. If you provide an allowance or cash gifts, encourage them to plan how to use it, rather than spending it all at once.
• Work and reward. Offering to pay for small jobs when they visit you—yard work, washing the car, or helping with a project—teaches them the value of effort.
• The first bank account. Going to the bank with a grandparent to deposit money makes the process memorable. Even modest deposits become powerful lessons in patience.

And when the grandkids make mistakes—spending too quickly or regretting a purchase—that’s part of the learning. Better they feel those lessons now, while the stakes are small.

C Is for Confidence: Teenagers at the Edge of Adulthood (Ages 13–18)

By high school, money becomes more real. First jobs, cars, college decisions—it all arrives quickly. This is the moment when your experience as a grandparent is invaluable:

• Share real costs. Show them a utility bill, tuition invoice, or car insurance statement. Sometimes, learning about the real costs of life from a grandparent makes the lesson stick.
• Teach credit. Explain the difference between debit and credit cards and why paying off a balance matters. A story about your own financial missteps can be a powerful teacher.
• Encourage saving and investing. If they have earned income from a summer job, consider matching their contributions into a Roth IRA. It’s a gift of money and of perspective.
• Plan together. Help them save toward a meaningful goal, whether it’s a car, trip, or college fund. Walking through the steps makes the abstract feel achievable.

What you’re building here is confidence. You want them to step into adulthood believing, I can make smart financial choices.

D Is for Discipline: Passing Down Family Values

Wealth isn’t only about dollars. It’s about discipline—how we use, protect, and grow what we have. And this is where grandparents can shine.

Ask yourself: What values do I want my grandchildren to inherit?

• Is it generosity? Invite them to help decide where your donor-advised fund makes a grant.
• Is it stewardship? Talk about why you created a family trust and how it helps preserve not just money, but family harmony.
• Is it independence? Share the story of how you built your career or business, and the sacrifices behind it.

Children and teens may forget a financial fact, but they won’t forget your stories. That’s where values become legacy.

E Is for Experiences: Learning by Doing

Money lessons are absorbed best when they’re tied to real-life experiences. Grandparents are in a unique position to create these opportunities:

• Trip savings. Show them how setting aside money each month made a family vacation possible.
• Budget challenges. Give a grandchild a set amount to plan a family dinner or outing. The trade-offs they make will be more impactful than any lecture.
• Investment conversations. Explaining why you chose one fund over another can spark curiosity and confidence.

If you’ve been contributing to a 529 plan for their education, this is a wonderful time to explain what it means. It’s not just a gift—it’s a lesson in responsibility and opportunity.

Legacy Planning in Action: Tools That Teach

Many of you already use legacy planning tools. With a little creativity, they can become teaching tools too:

• 529 plans: A tax-smart way to fund education while showing grandchildren how saving for a goal works.
• Trusts: Beyond their tax benefits, trusts can be explained as a stewardship tool—money set aside with purpose and discipline.
• Donor-advised funds (DAFs): A wonderful way to involve grandchildren in charitable giving and reinforce generosity.
• Gifting appreciated assets: Can teach investing, market cycles, and the benefit of patience while offering tax efficiency.

When tied to your family’s story, these tools become more than financial structures—they become lessons in action.

F Is for Future: Safeguarding Generational Success

Ultimately, the Financial ABCs are about preparing your grandchildren for a successful future. Awareness, basics, confidence, discipline, and experiences—they’re the foundation for lifelong financial literacy.

And for grandparents, it’s also about protecting your legacy. Studies remind us that wealth often dissipates within three generations. The antidote isn’t simply tighter documents or more complex planning—it’s pairing strategy with education and values.

At BGM, we see these lessons as an essential part of wealth management. Yes, we help optimize portfolios, create tax-efficient plans, and design trust strategies. But the most enduring part of your legacy isn’t the inheritance itself—it’s the perspective, discipline, and wisdom you instill.

Final Thoughts

If you want your grandchildren to thrive financially, don’t wait until they’re adults. Start the ABCs now. Whether it’s through jars filled with allowance money, a savings account opened together, or a conversation about investing, each step builds financial fluency and empowerment.

When you tie these lessons to the planning tools you’ve already put in place—trusts, 529s, donor-advised funds—you strengthen not only your financial plan but also your family’s sense of why it matters.

In the end, the greatest gift you leave isn’t the money itself—it’s the knowledge and values that will guide your family for generations to come.

The opinion of the author is subject to change without notice and must be considered in conjunction with relevant regulation, as well as subsequent changes in the marketplace. Any information from outside resources has been deemed to be reliable but has not necessarily been verified. Each individual has unique circumstances to which this information may or may not be relevant. Under no circumstances will this information constitute an offer to buy or sell and it does not indicate strategy suitability for any particular investor.