3346: How Should Parents Talk To Their Kids About Money? by Lisa Harrison of Mad Money Monster

Summary

Optimal Finance Daily – Episode 3346

"How Should Parents Talk To Their Kids About Money?"

Source: Lisa Harrison of Mad Money Monster
Host: Diania Merriam
Date: November 9, 2025

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Episode Overview

This episode delves into the often-taboo topic of how parents should approach discussing money with their children. Lisa Harrison, via her article on Mad Money Monster, provides a blend of personal experience, practical strategies, and reflections on financial upbringing. The episode, narrated with warmth and honesty, explores how different family money cultures shape children and offers hands-on advice for fostering healthy financial habits from a young age.

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Key Discussion Points and Insights

1. The Necessity of Talking About Money

• Opening Question: Do parents have an obligation to teach their kids about money? Lisa’s stance is a firm yes, acknowledging her personal bias as a finance blogger.

  “In this day and age, do parents have an obligation to teach their kids about money? I obviously think the answer is yes.” (01:19, Lisa Harrison via narrator)

• Taboo Nature of Money: Money is still considered a taboo topic in many families. Lisa reflects on her own upbringing where money was not discussed openly.

2. Varying Family Approaches and Their Impact

• Different Styles, Same Gaps:

  • Lisa’s family avoided money talks entirely, ingraining the idea that money was private and not to be discussed.
  • Her husband's family discussed money more openly but with a pressure-laden, anxiety-provoking tone—again, not teaching nuanced financial literacy.

• Long-Lasting Effects:

  “The conversations they had with their kids about money created deep anxieties that persist until this day.” (01:38, Lisa Harrison via narrator)

  • Both styles led to gaps in understanding and, in Mr. MMM’s case, lifelong financial anxiety.

3. Strategies for Teaching Kids About Money

• Age-Appropriate Conversations:

  • Simplify concepts for younger children; tailor complexity as children grow.

• Create a Safe Environment:

  • Encourage questions and avoid shame or secrecy around money.

• Show Real-Life Examples:

  • Let children see household expenses; talk about the cost of utilities and everyday living.
  • Use Monopoly as an educational tool to demonstrate budgeting and spending.

• Earning and Spending:

  • Assign chores above basic expectations and pay for extra work to teach the value of earned income.

• Explain Financial Concepts:

  • Introduce the difference between earned and passive income.
  • Discuss taxes and their impact.
  • Teach the concept of time as an asset: “Tell them that investing smaller amounts when they're younger will yield higher profits than investing larger amounts when they're older.” (03:03, Lisa Harrison via narrator)

• Accessible Investing:

  • Break concepts down: "We explain investing to our 7-year-old by calling it buying companies. She gets that." (03:31, Lisa Harrison via narrator)

4. Personal Anecdotes About Financial Upbringing

• Lisa’s Experience:
  • Parents’ main advice: Be financially independent and never rely on others.
  • Though limited, this advice became foundational.
• Mr. MMM’s Experience:
  • Parents modeled frugality and debt aversion but used anxiety and fear as motivators.
  • Resulted in persistent financial anxieties as an adult, even as a co-founder of a finance blog.
• Memorable Quote:

  "His instruction came more in the form of dinnertime talk that went something like, ‘what are you gonna do about a job? You're going to be 16 soon and if you think for one second we're going to be paying for car insurance, you have another thing coming.’" (04:35, Lisa Harrison via narrator)

5. Breaking the Cycle: How They Teach Their Daughter

• Practical, Open Approach:

  • Frequent, anxiety-free conversations about spending, saving, and investing.
  • Actively involve daughter in decision-making; value her opinions.

• Child’s Influence on Family Decisions:

  "The best was when we were debating whether or not to buy a new area carpet for under our dining table. Her two cents went something like 'why don't you just clean the one we have and save the money?' Wow. We were schooled and that's exactly what we did.” (06:00, Lisa Harrison via narrator)

• Leading by Example:

  • Seeing her advice implemented reinforced lessons about value and restraint.

6. Closing Reflections on Bias and Teaching

• Host’s Key Takeaway:

  • Host Diania Merriam urges listeners to self-reflect on their own financial biases and how these impact the way they teach kids, not just about money but life in general.

• Encouragement:

  “It’s important to remember that we all carry biases with us and they absolutely influence how we teach our kids about the world....we do want to investigate how we present our ideas and make sure that we are always positioning our kids to make choices for themselves.” (09:53, Diania Merriam)

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Notable Quotes and Memorable Moments

• Lisa Harrison on core teaching:

  “I had parents that didn’t understand much about money... they always taught me that money was taboo and it shouldn’t be discussed.” (03:46, Lisa Harrison via narrator)

• On the value of a simple but lasting lesson:

  “I remember my mom telling me things like make sure you always have your own money and never depend on anyone else to support you… it was probably the best financial advice I ever received from my parents.” (04:06, Lisa Harrison via narrator)

• On children’s capacity for financial wisdom:

  "We talk to her so often about money that it's become commonplace conversation. She's even started to freely give her opinion when we’re embarking on a household financial decision." (05:54, Lisa Harrison via narrator)

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Timestamps for Key Segments

• 01:19: Introduction: “How Should Parents Talk To Their Kids About Money?” – Lisa Harrison
• 02:00: Strategies for effective money conversations by age and context
• 03:31: Breaking down investing for kids (“buying companies”)
• 04:06: Lisa’s parents and lasting takeaways
• 04:35: Mr. MMM’s upbringing and its anxious consequences
• 05:54: How Lisa and Mr. MMM talk to their own daughter—practical example
• 06:00: Anecdote: Daughter’s advice on saving for a rug
• 09:53: Host's final reflection: examining parental biases in financial (and general) upbringing

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Final Thoughts

Lisa Harrison’s article highlights that while there’s no one-size-fits-all method to teaching kids about money, open and honest communication—adjusted for age, personality, and family style—lays the groundwork for financial confidence. Both the pitfalls of secrecy and the dangers of anxiety-based teaching are vividly illustrated, as is the power of modeling healthy habits and empowering kids to participate. Diania Merriam wraps up with a thoughtful challenge to all parents: recognize your biases and strive to give children not just your values, but also the freedom and tools to shape their own.

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A perfect resource for parents who want to raise financially literate children—without the stress, secrecy, or shame.

Transcript

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Edu welcome back to another bonus Sunday episode. This is where we get to hear from one of our other shows in our podcast network and today's comes from Optimal Relationships Daily. So with that, here's Greg as we optimize your life.

[Podcast Host (Mr. MMM)]

How should parents talk to their kids about Money? By Lisa Harrison of madmoneymonster.com in this day and age, do parents have an obligation to teach their kids about money? I obviously think the answer is yes. However, since I am a personal finance blogger, I'd say I'm a little biased. I understand that the topic of money has been, and still is in some circles, a taboo subject that should be avoided in conversation. My own family subscribed to this line of thinking. When I was a child, Mr. Mmm's family talked about money, but had a different style than my family. Unfortunately, the conversations they had with their kids about money created deep anxieties that persist until this day. Neither one of our families deserve any awards to financial literacy or education. So let's examine various strategies that can be implemented to talk to kids about money. Then let's take a look at the style in which our families talk to us about money and how that has served us throughout our lives. Strategies to talk to your kids about money Obviously, talking to your kids about money is going to need to be adjusted based on the age of your kids. Smaller children are not going to understand compound interest or dollar cost averaging in the way older children will. Strategies for talking to your kids about money include making sure that you create a safe environment. Before discussing the topic, explain the importance of earning, saving and investing and how it will relate to them throughout various stages of their lives. Allow them to see the family finances and monthly expenses for younger children. Teach them that turning on a light or heating the house actually costs mom and dad money every month. Use a game like Monopoly to teach them what it's like to have a monthly income and what it's like to use that money for necessities like rent, electricity, food, transportation, etc. When they see how little they have left over, they will start to understand just how much money it costs to run a household. Have your younger children engage in chores over and above what's expected of them as being part of the household and pay them for their work. Explain the difference between earned income and passive income. Explain what taxes are and how much is taken out of earned income versus passive income. Talk to them about their most valuable asset time. Tell them that investing smaller amounts when they're younger will yield higher profits than investing larger amounts when they're older. Younger children can learn about investing by tweaking the explanation too. We explain Investing to our 7 year old by calling it buying companies. She gets that. The possibilities are endless. How My Parents Talked to Me About Money Unfortunately, I didn't have the luxury of being taught about money or money management. Instead, I had parents that didn't understand much about money. They weren't able to differentiate between earned income and passive income, nor were they able to teach me anything about investing because they didn't know anything about it themselves. For all intents and purposes, my parents were old school. They always taught me that money was taboo and it shouldn't be discussed. I was told I should never talk to anyone about their finances because it's rude and it's private. Now, in some situations that is true. However, my mom and dad were making a huge blanket statement as I got older. I remember my mom telling me things like make sure you always have your own money and never depend on anyone else to support you. Believe it or not, I took those throwaway statements and tucked them away in the back of my head. I actually incorporated them into who I intended to be when I grew up. It was probably the best financial advice I ever received from my parents. I can't remember exactly when I became enamored with personal finance and educating myself about earning and investing, but I do remember being quite young. It was probably one of those things that I felt was forbidden, so I went after it with fervor. How Mr. MMM's parents talked to him about money Mr. MMM's parents were a different breed compared to mine. They were all about earning money, embarking on entrepreneurial endeavors and living completely debt free. Even with all of that under their financial belt, they still weren't savvy in the way of investing or building massive wealth. They lived an extremely frugal lifestyle and paid off all their debt. Full stop. Although this awesome behavior was modeled for Mr. MMM and it did wear off, by the way, he didn't get much more instruction than I did. His instruction came more in the form of dinnertime talk that went something like what are you gonna do about a job? You're going to be 16 soon and if you think for one second we're going to be paying for car insurance, you have another thing coming. Oh, did I mention he was 14 years old when conversations like this started? Yeah. Because of this abrasive style, Mr. MMM developed a fear of money and an anxiety of never having enough. Even until this day when we sit down to discuss finances, it's anxiety producing for him. You'd never think that the other half of a personal finance blog would have money anxieties, but he does. Fortunately, we're killing it when it comes to our finances, but it wasn't always this way. Hopefully his fears will subside as we get closer and closer to our financial independence goals. How We Talked to Our Daughter About Money these days we have a little girl of our own. We're doing our best to make sure she understands the importance of earning, saving and investing money at a young age. Our commitment to her is is that she will not feel anxiety when the topic of money comes up and that she will know exactly how to handle her finances for routine expenses, long term investing and a little fun here and there. We talk to her so often about money that it's become commonplace conversation. She's even started to freely give her opinion when we're embarking on a household financial decision. The best was when we were debating whether or not to buy a new area carpet for under our dining table. Her two cents went something like why don't you just clean the one we have and save the money? Wow. We were schooled and that's exactly what we did. It lasted another year before we had to replace it, but the fact that we took her seriously and she saw us enact it and save the money hopefully made a big impact on her. You just listened to the post titled How Should Parents Talk to Their Kids about Money? By Lisa Harrison of madmoneymonster.com if you're.

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[Podcast Host (Mr. MMM)]

Okay and thank you so much to Lisa for this one. A good post that speaks to the way we might teach our kids about anything, really, not just money. And that's what I hope that you're able to focus on after hearing this article. We heard a lot about biases in this article, right? Lisa's biases as a finance blogger, her husband's parents biases and how they indirectly affected how he still approaches money as an adult. It's important to remember that we all carry biases with us and they absolutely influence how we teach our kids about the world. So today I encourage you to question your own biases what parts of life are you strongly opinionated on for better or worse? Maybe others comment on how steadfast you are in your ideas or maybe you find that you don't associate with anyone who thinks differently than you do about one topic or another. Take these into consideration and how they might come through in your parenting. Is it great to share our values with our children? Most certainly it is. I'm not saying to stop doing that, but we do want to investigate how we present our ideas and make sure that we are always positioning our kids to make choices for themselves. So think on that today. My friends. It's time to wrap things up for now but I thank you so much for being here and spending some time with us. Do share this episode with any other parents or financial enthusiasts or whomever you think might enjoy it and other than that, have a great rest of your day and I'll talk to you again tomorrow where your optimal life awaits.