by Mikalea Chonen

Roth IRA, high-yield savings account and mutual funds were just a few of the phrases regularly thrown around my family’s dinner table when I was growing up.

I didn’t realize it then, but having a parent who worked as a financial advisor for several years meant that I was gaining invaluable financial knowledge. Those conversations, which not all of my friends and peers got to experience with their own families, helped boost my confidence with money and set me on the path to becoming a financial journalist. 

That’s true even though I grew up in a household of lower socioeconomic status. My brother and I ate reduced-price lunches throughout our entire time in the public school system. My dad’s stint as a financial advisor ended after only five years.

What I didn’t know as a teenager, hearing my dad rant about diversifying your income and putting money into investment accounts, was that my exposure to his personal finance lessons at an early age would stay with me for years to come.

HOW FINANCIAL EXPOSURE IMPACTS KIDS

It’s no surprise that kids absorb habits from their parents. Behaviors around money are no exception — whether your parents talked to you about money or not.

Kids primarily learn about money from modeling their parents’ behavior, Brad Klontz, a clinical psychologist and certified financial planner, tells CNBC Make It.

Klontz calls these moments “financial flashpoint experiences” — events that happen in childhood involving money that kids may or may not fully understand, depending on whether or not their parents explicitly explain their meaning.

Think about being told not to spend your $5 allowance on candy or toys as a kid: Did your parents explain the value of saving your allowance? Did they explain the concept of investing? Or, did they simply tell you not to spend it because they said so?

It makes sense that parents should teach their kids financial literacy. But in many instances, money can be a sore subject for families. And parents may not be equipped to teach their kids about a topic they are not totally comfortable with themselves.

“Many parents don’t talk to their kids about money because they’re stressed about it, and they don’t feel good about themselves around money,” Klontz says.

The problem may not be that your parents did not want to explain the concept of saving your money instead of buying a chocolate bar. It’s possible they just didn’t feel confident enough about their own savings to explain the concept. 

Over half of Americans don’t have enough in savings to cover a $1,000 emergency expense, a January survey from Bankrate found. And roughly 20% of employees regularly run out of money before their next paycheck, according to Salary Finance, which is up from 15% a year ago.

“You’re trying to give your kids a leg up, and the leg up they need more than anything, more than giving them money, quite frankly, is giving them the mindset that will help them manage [wealth] well and acquire it,” says Klontz.

HOW YOU CAN HELP YOUR KIDS 

About 83% of U.S. adults believe parents are the most responsible for educating their children on financial literacy, according to a recent survey by CNBC and Momentive, a market research company. Conducted in March, the poll included 1,149 parents.

A few ways you can start educating your kids are by using online resources, being aware of your money behaviors and introducing financial topics as early as you can.

“By the age of 3, children understand value. By the age of 7, children have developed a relationship with money. Yet, half of parents don’t talk to their kids about money, so there’s a problem there,” Carissa Jordan, co-founder of Benjamin Talks, an online financial literacy resource for parents and kids, tells CNBC Make It.

If you’re starting to dive into financial literacy with your kids, Jordan says one of the first places to start by is giving them an allowance.

Allowances help kids feel involved with money decisions, and are a good way to learn about budgeting, saving, delayed gratification with spending and donating money to fundraisers they enjoy, Jordan says. 

If you’re not financially able to set up an allowance, it’s also beneficial to simply talk about the aspects of your everyday life that involve money as they arise, Nikki Boulukos, Jordan’s Benjamin Talks co-founder, tells CNBC Make It.

“Just look at your everyday life and narrate as you go,” she says. “If you’re at a coffee shop with your child, you should be [saying]: ‘Mommy is going to get this coffee by swiping my credit card and money from my credit card is going to pay the coffee shop. At the end of the month, I am going to take money from my bank account to pay off my credit card.’” 

If kids feel included in the conversation about money from an early age,  it can help inspire their curiosity and likely make them more comfortable talking about money for years to come.

HOW MY DAD IMPACTED ME

My dad passed away in 2021, but I can still hear his voice echoing in my head: ”‘Automate your monthly bills. Invest at least 10% of your income into retirement and investment accounts. Don’t let your bills exceed 50% of your income.’”

Today, I find myself working at CNBC and pursuing a career in financial journalism. Not only did my dad influence my career, but he shaped my long-term outlook on personal finance.

I have a Roth IRA account, an investment account on Acorns, a high-yield savings account and a CD, or certificate of deposit. Not every 20-something still in college can say they have done the same.

In high school, I came home one day and told my dad that my favorite class was AP Economics, an advanced placement course centered around macro and microeconomics. 

His eyes lit up, and he told me, “I guess all of that money talk rubbed off on you.”

He was absolutely right. 

Read the article on cnbc.com