Should Parents Teach Kids About Money or Let AI Do It? Experts Weigh In
These days, kids don't have to do the math. Previous generations used calculators and spreadsheets to manage their finances, but AI tools can now handle that.
As a parent, you might wonder if you should embrace bots like ChatGPT and Gemini as the new normal or teach your kids standard financial principles. The answer is actually both, as kids need to learn financial principles and how to use evolving technologies to their advantage, said Lucas Wennersten, certified financial planner (CFP) and founder of 49th Parallel Wealth Management.
Read More: I Asked AI To Make Me as Much Money as Possible: Here’s What Happened, According To Codie Sanchez
Find Out: Start Growing Your Net Worth With Smarter Tracking
"Just like kids should learn how to cook even though we have restaurants, and we kept teaching math after the calculator," he said. "Eventually, we will have a form of tech to do almost everything for us."
Just because AI can handle a lot of personal finance tasks doesn’t mean we should let it take over.
"I think we all need to continue to do the things that make us human," Wennersten said. "We need to be active mentally and physically to be healthy."
Despite that, you don’t always have to do everything for yourself, he said.
"Hire people or use tech to do things you don’t want to do or if you feel you will get better results with a professional," he said. "But it is good to have a basic understanding of the things you need in your life."
The Gap in Financial Education
Kevin C. Feig, CFP, certified financial therapist (CFT) and founder of Walk You To Wealth, agreed that it’s important to teach kids financial principles. As a father himself, he’s actively working to ensure his 12- and 14-year-old sons grow up financially literate.
"Most schools don’t teach financial literacy, yet my kids learn cursive and everything possible about parallelograms," he said.
Since most kids aren’t learning about personal finance at school, it’s up to parents to teach it at home. To achieve this, Feig recommended taking the following five steps: normalize talking about money, use storytelling to create understanding, encourage self-management, reward hard work through a parental-match system and instill the value of giving.
Normalize Talking About Money
Normalizing these discussions is the first step, because money discussions are taboo in many households, he said. Feig and his wife make a point to talk about money in a kid-friendly way that doesn’t involve burdening their children with financial woes.
"We talk about paying bills, the cost of items and the importance of saving for unexpected events," he said. "Additionally, I discuss the stock and cryptocurrency markets with my kids."
Use Storytelling To Build Understanding
After normalizing money talk, he said it’s important to create an understanding by sharing stories that kids can comprehend.
"For example, when my kids were younger, I shared a fictional story about ‘Money Babies’ to illustrate the concept of interest, especially compound interest," Feig said. "In the story, a dollar gives birth to coins, which then give birth to more coins."
After sharing this story with his kids, he encouraged them to build good habits by investing $2 of their weekly allowance into their own brokerage accounts.
Encourage Self-Management and Responsibility
As for learning to self-manage money, he said this teaches them to save, as well as learning delayed gratification and understanding the cost of items.
"Providing them with actual cash gives them a tangible experience, which is also valuable," he said.
Teach the Value of Giving
Finally, he said you need to teach kids the importance of giving back. A few years ago, Feig and his wife discussed their contribution to a donor-advised fund with their sons, which prompted them to donate their own money to adopt two sloths.
This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
More From MoneyLion:
