What Kids Really Hear When You Talk About Money

Every parent wants their kid to grow up smart and independent and confident with money. But if you want to teach your kids to be good with money, you need to get good yourself. And that's where so many of us struggle, because without realizing it, we end up passing down the same fears and the same bad habits that we grew up with. Today, I'll show you how to break that cycle. You're going to learn how to identify the invisible scripts that are holding you back and how to rewrite that messaging so you can live a more satisfying life for you and your family. And later, I will reveal the number one phrase I will never say around my kids and what to say instead. What do you remember your family teaching you about money when you were growing up? Recently, I was in Madison Square Park in New York. I asked strangers this exact same question. Listen to their answers. Rich people were bad people. They did something bad, and that's why they're rich. Nothing. Nothing at all. Nothing at all. Save a lot. Don't take out any loans. I took out student loans, which was a big thing. You notice what people said? We didn't talk about money. Rich people are bad. Debt is shameful. These are invisible money scripts. They are unspoken rules that you absorb and you believe, and they stick around for decades. If you're not careful, you will pass them straight to your kids. How did your parents talk about money when you were growing up? Do any of these sound familiar? Money doesn't grow on trees. We can't afford it. There's more to life than money. Translation: Let's avoid talking about money because this makes me, the parent, uncomfortable. And sometimes it's also what wasn't said. I once spoke to a couple, Anna and Will, who were under serious financial stress. Anna admitted they were drowning in bills. But every time I asked Will how things were going, he smiled and said, we're fine. And my defense mechanism is to just look at the numbers. At themselves and say, we're going to be fine. Now imagine being a kid in that household. You see one parent, usually mom, stressed out, and the other one, usually dad, sitting back saying, we're fine. It's all going to work out. The message you absorb is money is confusing. One parent is stressed out, sweating. The other is saying it's going to be fine. I don't know what to make of it. I'm not going to talk about it. These are lessons that we absorb from our family over and over and over. Just like we all unconsciously pick up patterns of behavior from our parents, like how to keep the house clean, how to take a shower, how to empty the dishwasher, we also pick up messages about money. And these little patterns get baked in early. And if we don't notice them, we will spend the rest of our lives living out someone else's invisible money script. Take this little kid called Little Timmy. Actually, what the fuck? Why are we calling this little kid Timmy? I'm Ramit Sethi. This little kid is named Raj. Little Raj sees mom panic over a bill and they think money equals stress. Little Raj grows up, feels guilty buying a $5 coffee. That's not because of the coffee. Little Raj is a freaking engineer. Little Raj works at OpenAI. He graduated with a 3.9 in CS. He feels guilty spending money because he heard the phrase "money is tight" 8,000 times growing up. Every unnecessary purchase was a crime against the family budget. You want to change that? You want to change it for yourself and for your kids? Let's reframe it and introduce some positivity around money. Here's an activity idea. I want you to let your kids overhear you reframing a money moment in real time. Here's an example. This dinner was $90. I'm so glad that we planned for it and we set money aside ahead of time. Eating together is one of our favorite things to do as a family. You see, that's a script, and those scripts can be taught, and those scripts get absorbed. The key is to replace the negative scripts that you inherited with positive ones that make you more confident and competent about money. So how do you start rewriting those scripts for yourself? Here are a few questions directly from my Rich Life Journal. What do my current money beliefs cost me emotionally? What would happen if I tried on opposite scripts compared to the ones that I believe just for one week? For example, instead of we can't afford it, I might say that's not part of our rich life right now. Here's why. What are my money dials? What are the things that I love to spend money on and I can turn those dials up and down? Where do I want to spend freely and where am I happy to cut? What's one financial decision I can walk my child through this week, step by step? And finally, what is a $30,000 question I'm not asking about my family's future? For example, my savings rate or my investment rate. Even if you only take one of those and put it into practice this week, you will already be showing your kids a healthier, more intentional relationship with money. Now, after. Lil Raj sees mom or dad calmly explain how this bill has already been planned for. We planned ahead. We are happy to be able to go out to a restaurant. Money is calm, cool, and methodical. So many of us absorb invisible scripts about money that are negative. You have just learned how to flip those into positive scripts. You know, a lot of people are just winging it with money. They're guessing about investing. They're trying to save when they can. And then deep down, they just hope it'll all work out. But that's not the way we want to approach money. That is why I created my money coaching program, so you can stop guessing and finally take control of your money. In my money coaching program, you'll get monthly coaching from my team and me, step-by-step playbooks for earning more and paying off debt and investing. Plus the accountability to really follow through. Imagine logging in and seeing the exact next move for your money. No more confusion, no more homework that you've assigned yourself to figure it out later. That's exactly what my money coaching program does for you. Go to iwt.com/moneycoaching or click the link in the description below to join us today. You know, I spoke to a couple, Kevin and Michelle, and they had all the external signs of success. They had a big house. They had luxury cars, had a very stylish lifestyle. And on Instagram, they appeared to be quite successful. But when we dug in, they had almost no savings and they were carrying quite a bit of debt. Now, imagine what their kids were learning. Often that money is confusing, that we say one thing, but we do another, or that it's okay to spend money and rack up a bunch of debt because it kind of all works itself out anyway. Kids absorb these messages, the flashy cars, the vacation, the constant look how well we're doing, and then one or both parents crying when it's time to pay bills. They don't know how to make sense of this, so they create meaning themselves. What's the problem here beyond the fact of the obvious debt? The problem is that there are no active lessons about money. Now listen up, America's parents, and get ready to hear some tough love from a non-parent. You don't talk about money with your kids. I fucking know. I talk to you every single day on my podcast. Sitting here saying, oh, I don't wanna talk to kids about money, let's protect them, let kids be kids. Why don't you raise your kids up and treat them like they are competent enough to understand how money works? I'm gonna tell you the answer to my own rhetorical question. You don't talk about money because you don't understand money yourself. You're afraid of it, so you pass that fear on to your kids. Ho ho ho, let's not talk about money, it's so adult, so bad, let kids be kids. I don't wanna talk about debt and burden them. Your kids are going to go defenseless into the world. They don't know how debt works. They've never heard of an amortization chart. Neither have you. And then they're going to end up on my podcast 35 years from now. Can we change this fucking dynamic? The only active lesson that the majority of parents teach their kids about money are negative platitudes. We can't afford it. We don't talk about money in this family. Money doesn't grow on trees. It just shuts the conversation down. There's so much more to being good with money than just paying the bills. Kids need to understand how to evaluate risk, how to put money aside, how investing and compounding builds real wealth. Like, for example, do your kids ever see you setting aside money for saving or investing, or do they just see you randomly at the computer? Do you ever explain the trade-offs that you are making? Here's why we are buying this. Here's actually why we're spending more on this car or this spaghetti. Explain why. Do you ask for their input? Do you give them small age-appropriate tasks? This is where the real lessons come from. And I see a huge difference between children who were raised up wealthy and children who were not. Wealthy families— I'm speaking generally here— tend to talk about money, just like healthy families tend to talk about food and fitness. These topics are not shrouded in the shadows. They are talked about openly. Here's why we eat fruit and vegetables. "Here's why it's okay to splurge on a pizza once in a while." They talk about them. They shine a light on them because these are worthy topics of being discussed. And the good news is these invisible scripts that you grew up with, you can change them. You actually don't have to be perfect. You just have to be intentional and start those conversations. So before, Lil Raj sees mom working late at night, missing family dinners. Okay, what do they take away? More money, but I miss my mom. After, Little Raj sees mom prioritize a weekend trip and talk about it. Talk about the planning, get the kids involved. Little Raj learns that time and memories are also part of wealth. The point is that you can connect money to amazing experiences with your family. You can explain how earning money allows you to have a roof over your head and it allows you to pay for dog food for your dog and allows you to all be safe. Next, I'm going to show you how to change the way that you think about money and how to teach your kids those lessons as well. A lot of people can manage money on their own, but when you have specific questions that you need to be precise about, like how much can I afford to pay for my kids' college, you may want to get help. From the many parents I've spoken to, it's so obvious that parents want to do as much as they can to help their kids financially. But that raises a lot of questions, like, can I afford the right schools for them? Can I afford to send them to these activities? Can I help them with a down payment for their house or help them pay for college so they graduate student loan debt-free? Well, for parents who have these questions, working with a financial planner can help you create actual scenarios using your actual money. And that's where our partners at Facet can help. Facet offers dynamic financial planning that evolves with you including monthly check-ins to help you stay accountable so you can stay on track with your financial and retirement goals. And those may include specific things that you want to help your children with. All Facet planners are CFP professionals and fiduciaries supported by a team of specialists. And unlike traditional advisors who charge a percentage of your assets, which can easily cost tens or even hundreds of thousands of dollars over your lifetime, Facet charges an affordable flat membership fee for financial planning. I've worked with Facet to help many couples on my podcast understand specific scenarios like can they retire early? Can they pay for their kids' college? Can they take even grander vacations every year? So if you've ever wished that you had a smart team to help guide your specific financial decisions, check them out to see if a financial planner is a fit for you. Head to facet.com/Ramit or click the link in the description to learn more. All right, listen, let me tell you straight up, you do not want your kids learning about money from some freaking whole life insurance scammer on TikTok. These guys corrupting your kids. Remember the old days? Your parents were afraid of you hanging out, loitering at 7-Eleven, getting in a gang. Nowadays, you're afraid of your kid going on TikTok, liking two of the wrong videos, ending up down a freaking tunnel, becoming a right-wing extremist, and also believing in whole life insurance as an investment. What the You want your kids to learn about money from you. And the best way for you to do that is for you to become really good at money, to define what your rich life is, and then to model that for your kids. You can tell them all the stuff you want, but they are going to watch you and they're going to absorb what you do. So once you break down what your rich life looks like, they're going to naturally absorb it. And by doing this, you show your kids 3 powerful things. Number 1, intentional spending brings joy. Like when you choose what matters most, when you go out to a restaurant and you are able to afford to order 2 desserts and you have this big smile on your face, you go, look, we are so lucky that as a family, if we see cheesecake and pecan pie, we can order both. That's because we've been very fortunate. We save our money. And when we come out here, we love to eat. "dessert." Do you see how that naturally communicates positivity? Kids pick up on that. Number 2, automation builds wealth. You could just skip the lectures where you're sitting there telling your 14-year-old, "Oh, why you spend so much at Starbucks? Such a waste of money. If you invested in a company—" You think they want to hear that? They're literally tuned out. They're in another universe right now. Okay? You don't have to tell them that. You can simply help them set up automatic savings. So that every single month you show them how your money is automatically being put aside. You can do the very same thing for them and you can help them along. Number 3, confidence comes from examples. Kids are not gonna learn from you lecturing them about all the bad stuff they are doing with money. They're going to learn by watching how you think about money, talk about money, and feel about money. So if you know what your rich life is, if you get excited, if you ask your kids for their thoughts on what excites them, and then you get excited for them, they are naturally going to learn about money. I remember my nephew when he was around 10 or so years old, he told me that he wants to buy a Rolex. And you know what my reaction was? That is awesome. What kind of Rolex? What does it look like? Show me on the website. I got excited because he was excited. The crazy thing is when I posted this, do you know how many people said, "Hahaha, such a waste of money for a little kid. Why would this stupid kid want to put this money in a Rolex? That's so superficial." Those are the very type of people who have their kids tell them something they're excited about, maybe a video game, maybe a trip, maybe basketball shoes, and they shit on it. You don't realize what you are doing, but you are actually teaching your kids that that money is something to be hidden, to be ashamed of. Instead, in the rare case that your kids get excited about something, match that energy. Get excited too. You can talk about the numbers later. If you're not sure what your rich life looks like, that's okay. Most people are not. But that's why I created my conscious spending plan, which is free. You can grab it in the description box below. You can start mapping out what really matters to you. Now let me show you what this looks like in practice. Here are a few examples to get you started. Number 1: Kids' night out. Give them a number and let them plan the whole night. It could be $20, $50, $100. They have to decide and they have to make the tradeoffs. Are they going to order appetizers at dinner or 2 entrees? It's up to them to decide, and they have to factor in things they may not have thought about, like taxes and tip. This teaches them how money decisions affect their entire experience. Number 2, the family generosity fund. I love this one. Set aside $20 or $50 every month. As a family, you decide where that money goes. It could be a shelter, a classmate's fundraiser, a food pantry. And this teaches kids that money is not just about spending on things purely for ourselves. It's also about being generous. It's about shaping the kind of person that we want to be. Number 3, let your kid pick a money dial. A money dial is one area of life where you love spending on, like travel, food, health. Where you can turn that dial up and spend more guilt-free while cutting costs on things you don't care about. So for example, if your kid is obsessed with books, let them blow $50 guilt-free. Tell them, this is one of our money dials. We are going to go out and buy Ramit Sethi's books, I Will Teach You to Be Rich and Money for Couples. We spend on what we love. This is a lesson that sticks with kids forever. At the same time, you can also get their input on what you should spend less on. Some other big picture examples: yearly family trips, sports camp, art classes. So before, little Raj hears "we can't" and thinks money equals deprivation. But now, after these lessons, Raj is hearing "we are saving for something we care about," and he learns that money is a choice. Now that your kids know your big picture priorities, let's zoom in. It's time to show them how money works in everyday life. This is where the lessons happen naturally without a lecture. They don't need a boring chart on compound interest. They need to see it and feel it and make decisions in real time, sometimes making horrible fucking decisions. Hey, I think I wanna take our family dinner budget and go to Chili's. You have the worst fucking taste on planet Earth. Your palate is underdeveloped. It's horrific, but you choose. It's your choice. We're gonna get that disgusting, greasy burger and then parents go, "Mmm, so good." You have to lie. You have to lie to your kids. That's how you have to do it. Okay, here's some examples. Don't say budgeting. I fucking hate that word. Say, "Here's our pizza night fund." Budgeting sounds like broccoli. I don't even use budgeting in my own relationship. Pizza night sounds way more exciting. Guess the price game. Take your kids to the grocery store, pick an item, let them guess how much it costs. Help them build the intuition of what stuff costs. You're gonna learn a lot about their perception of money. What do you think these yellow onions cost? $42. Fuckin' read a label, little kid. Guilt-free splurge day. Once a quarter, everyone gets a set amount of money. You can do whatever you want with it. No guilt, no questions asked. And you lead the way. Show them what you are spending on and remind them, hey, this is for me. You might not want to spend your money this way, but I love it. Now what about you? Before Lil Raj gets a boring lecture about budgeting but never actually sees mom or dad actually spending money and smiling. After, Raj makes a real decision about where money goes and learns money is a tool for making choices. Now I'm going to move on to the number 1 phrase that I will never say around kids, and I pray you don't say this to your kids. But before I do, make sure you like this video and subscribe to this channel so you can continue to learn how to grow wealth and live your rich life. The number 1 phrase I would never say around kids "we can't afford it." You see what you just did? You left a mental scar on your child that will never be healed, and they will forever carry that pain for the rest of their life. How does it feel? Feels great to me. I'm not the one who did it to your kids. You did it. But we can change that. Now, on the surface, this phrase sounds harmless, maybe even sounds responsible. "Oh, we can't afford it." But the problem is it actually doesn't teach anything accept scarcity. It tells kids we don't have enough and we are powerless to change it. You are powerless to change it. Instead, you can replace it with something like this: "That's not something we are choosing to spend our money on because we're saving for something else. Do you want to help me plan that?" You see the difference? One is a dead end. It stops the conversation. The kid doesn't know what to do and they just go, "Money's bad." The other is an invitation to get involved. So you can make it a family ritual. Every month you can check your money map. Hey, you want that video game platform? Cool, let's build a plan. You can help track it. We will help fund part of it. That shifts the conversation from we can't to here's how we can. And with these tactics, you're not just teaching your kids about money. You're actually showing them how to make decisions and trade-offs and think long-term. And that is the kind of wealth that lasts. Okay, now that you've got these tools to raise kids confidently with money, here's where to go deeper. Financial strategies by income level. I want you to watch this next.