A Financial Planner’s Tips for Teaching Kids About Wealth Without Creating Entitlement*

By Melissa A. Barkley, CFP®

*As published in Kiplinger, June 21, 2025

For many high-net-worth families, one of the most pressing concerns isn’t how to preserve wealth — it’s how to pass it on without eroding the values that helped to build it in the first place. Parents often say the same thing in different ways: “I want to take care of my kids, but I don’t want money to ruin them.” That’s a valid fear. Without care, wealth can lead to entitlement or poor decisions. But with intention and transparency, it can become a tool for building responsible, grounded adults.

Many parents who’ve worked hard to accumulate wealth want their children to appreciate and preserve it — not squander it through a lack of financial literacy or poor financial choices.

But too often, families avoid discussing money, either out of discomfort or a desire to “let kids be kids.”

The result? Young adults who may be suddenly confronted with significant financial decisions yet have no foundation to handle them.

It’s easier to instill sound money habits and a work ethic in early childhood than to reverse poor habits in adulthood. A 5-year-old who blows a weekly allowance on candy learns a cheap lesson about budgeting. A 25-year-old who overspends an inheritance on a luxury car may be learning the same lesson — but at a far greater cost.

Entitlement doesn’t always stem from arrogance — more often, it’s a lack of preparation. Several common patterns can unintentionally set children up for unrealistic expectations:

• Giving children everything possible, regardless of whether it’s needed
• Delaying work expectations until adulthood. A child who’s never had to complete chores or earn money is unlikely to develop a strong work ethic overnight
• Avoiding conversations about money and values. Without context, children may misunderstand the role money plays in life decisions
• Failing to model thoughtful financial behavior. Telling children to avoid overspending while indulging in excessive purchases sends mixed signals

Starting the conversation

Financial education should begin in preschool, using simple examples. Over time, the conversation can become more sophisticated. For example, at a school book fair, giving a child $10 and allowing them to make trade-off decisions teaches budgeting. In middle school, opening a checking account and using banking apps can help develop financial habits.

By college, young adults can begin using savings accounts and even low-limit credit cards to learn about interest, payments and credit responsibility in a controlled environment.

Transparency around family wealth should be age-appropriate. Younger children don’t need to know exact figures, but they benefit from understanding how financial decisions are made.

For instance, explaining why an older, paid-off car is being kept instead of buying a new one introduces the idea of opportunity cost.

Everyday lessons

Strong financial values don’t develop overnight — they’re built through consistent, everyday experiences. Parents can begin laying this foundation early and gradually expand the lessons over time. Consider starting with these practical, age-appropriate strategies:

Have open, honest conversations about money. Even young children can understand basic trade-offs: saving up for one item means giving up another. As kids mature, expand the conversation to include budgeting, delayed gratification and financial priorities.

Assign responsibilities. Younger children can do household chores in exchange for a small allowance. Older kids should be encouraged to take on part-time jobs. Connecting effort to income is one of the most important lessons they can learn.

Use everyday moments to teach. Shopping on a budget, choosing between wants and needs, discussing a charitable donation or reflecting on a money mistake are all opportunities to reinforce values and decision-making. Or choosing causes to support together, showing children that generosity is a lifelong value.

Let them manage a small amount of money. Experience is the best teacher. Whether they save or overspend, making low-stakes financial decisions early prepares them for higher-stakes ones later.

Model the behavior you want to see. Children notice how you spend, save, give and talk about money. Demonstrating thoughtful decision-making leaves a stronger impression than any lecture.

Introduce real financial tools. Open savings or checking accounts with mobile access once kids are ready and help them track balances and expenses.

For older teens, a low-limit credit card can be a helpful way to introduce credit responsibility — but only if they’ve shown readiness.

Preparing for inheritance

As children become adults with their own careers and responsibilities, it becomes more important to discuss future inheritances and wealth transfer plans. Surprises — whether a windfall or a disappointing shortfall — can create tension or poor financial choices.

Many parents opt to give small gifts during their lifetime to see how children handle the responsibility. A child who invests or saves a gift may be more prepared for a larger inheritance than one who spends impulsively.

In some families, formal structures like donor-advised funds or family foundations help reinforce shared values and allow children to participate in giving decisions. Others incorporate charitable goals directly into their estate planning.

The key is alignment: estate plans should reflect not just financial assets, but the values families hope to pass on.

A long-term perspective

The goal isn’t to hide wealth or overwhelm kids with it. It’s to prepare them, thoughtfully and gradually, for the responsibilities that come with it.

That preparation doesn’t happen all at once — it’s built over years, through lived experiences, family conversations and intentional choices. For parents concerned about entitlement, that concern itself is a sign you’re on the right track.