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Your kids are already getting a financial education. You are the teacher, and the lesson is whatever they see you do.
That is true whether you have children, nieces, a spouse who leaves the money part to you, or parents you will someday help. Founders carry the family's financial knowledge in their heads and rarely say it out loud. Saying it out loud is the whole job.
How financially literate are most adults?
Not as much as they think. In the FINRA Foundation's 2024 National Financial Capability Study, 27 percent of more than 25,500 adults correctly answered at least five of seven financial knowledge questions, about the same as the 28 percent in 2021.1
I read that as permission. If most adults are still working it out, a family conversation about money does not need to wait until you are perfect at it.
What is a founder's edge in teaching money?
You run a live example. Revenue, cash, taxes, tools, mistakes and recoveries all happen in your house or your head. Most parents can only describe money in the abstract. You can show it.
Three habits of mine apply here. I never borrowed money for my business. I never used a credit card for business needs. I have always stayed liquid. Those are my rules, not yours, but explaining why I hold them teaches more than any worksheet. A kid who hears "we wait until we have the cash" learns what a buffer feels like.
Dr. Joe Dispenza made the point about where money beliefs come from in a clip posted on August 5, 2022. I am borrowing only his ordinary observation about childhood programming, not the wider claims in the interview.6
VideoGreatness Clips - Lewis Howes
The Psychology Behind MANIFESTING Money & Success! | Dr. Joe Dispenza
A 22-minute interview clip on how childhood experiences shape a person's relationship with money.
People have a relationship with money based on either what they've been told or what they've experienced in their outer environment.
For a founder, that is the case for saying the quiet part out loud. Children will form a relationship with money either way.
Narrate the decision
When you make a money decision, say the trade-off out loud. "We could buy it now, or wait and keep the cushion." Children copy reasoning faster than they copy rules.
Let small mistakes happen
A child who spends all their money on something silly at eight learns more than one lectured at twelve. Keep the stakes small and the debrief kind.
How do you match the lesson to the age?
Use the stages the CFPB uses: young children, school-age children to preteens, and teens to young adults. Each stage has its own activities and conversation starters in Money as You Grow.2 The topics below are my own suggestions, not the agency's list.
- Young children. Waiting, choosing and counting. Let them hold the money, pick between two things, and see the tradeoff.
- School-age to preteens. Earning, saving and giving. A small allowance or paid extra chores, split into spend, save and give.
- Teens. Real accounts, real paychecks, real mistakes. Show them a pay stub and where the tax goes. Talk about debt and interest with numbers.
- Young adults. Hand over the keys. Walk through your emergency buffer and why it exists. See two cash buffers, not one.
Can your child work in your business?
It can be a lesson in work and money together. The IRS explains the rules, and they are specific.
For a child employed in a parent's sole proprietorship, or in a partnership in which each partner is a parent of the child, payments for the child's services are subject to income tax withholding regardless of age. Payments for a child under age 18 are not subject to social security and Medicare taxes, and payments for a child under 21 are not subject to federal unemployment tax.3 If the business is a corporation, or a partnership where not every partner is a parent, different rules apply.
Two cautions, both mine. The work should be real, age-appropriate and documented, and the pay should be reasonable for what the child does. Talk to your tax professional about the exact setup before you pay a dollar.
Why earned income matters
IRA contributions cannot exceed taxable compensation for the year.4 That means a child with no earned income cannot contribute, and a child with earnings can be eligible. The combined 2026 IRA limit is $7,500, as I covered in the 2026 contribution limits breakdown. I am not telling you to open one. I am saying the door is real, and it exists because the income does.
What is a Trump account?
A newer option families are asking about. The IRS Form 4547 instructions describe it as an account an authorized individual can elect for a child. Generally the child must be under 18 at the end of the year of the election and have a valid Social Security number issued before the election.5
The rules to know, per the IRS:
- Contributions could not begin before July 4, 2026.
- Contributions from the child's parents or other people during the growth period are generally subject to a $5,000 annual limit.
- A $1,000 pilot program contribution is available by election for eligible children born in 2025 through 2028 who are U.S. citizens with an SSN.5
What about the rest of the family?
Financial literacy is not just for children. It also covers the adults who would have to act if something happened to you.
Does your spouse or partner know where the accounts are? Could a parent find the paperwork? The one-page "if I am gone" sheet from owning more than your business is as much a family tool as a business one. Hand it to the right person, in person, and explain it once.
Wealth you cannot explain to your family is wealth you will not pass on.
What can you start in the next 90 days?
Small, repeatable, and visible.
- EarnReal work, real pay
- SplitSpend, save, give
- ReviewA short monthly chat
- LearnOne concept at a time
- OwnA first real account
- Pass it onShare the plan
Pick one habit this week. A monthly fifteen-minute money talk is plenty.
I went years without thinking about retirement until my grandmother asked about my plan, and that story is here. Whatever your family looks like, you can start the conversation sooner than I did.
More guides are in the Investing and Retirement hub.
Educational content, not financial, tax, legal or investment advice. Talk to a licensed professional about your situation.
Keep building.Ekai
Questions people ask
Can my child work in my business?
Yes, with limits. The IRS says payments for a child under 18 working in a parent's sole proprietorship, or a partnership where each partner is a parent, are not subject to social security and Medicare taxes. Income tax withholding rules still apply. Pay for real work and ask your tax professional about wages and records.
Can a child contribute to an IRA?
IRA contributions cannot exceed taxable compensation for the year, and the 2026 combined limit is $7,500. A child with earned income can be eligible, a child with none cannot. Ask a professional whether it fits your family.
What is a Trump account?
A type of account for children established under a 2025 tax law. An election is made on IRS Form 4547 for a child under 18 with a valid Social Security number. Contributions could not begin before July 4, 2026, and most contributions are capped at $5,000 a year.
How financially literate are US adults?
In the FINRA Foundation's 2024 National Financial Capability Study, 27% of adults correctly answered at least five of seven financial knowledge questions, about the same as 28% in 2021.
Sources
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