According to the 2024 UBS Global Wealth Report, the U.S. is home to more than 22 million millionaires. That’s about 1 in 15 Americans claiming membership in the two-comma club.
Some, of course, got rich the old-fashioned way — they inherited it — but most built their wealth from scratch. According to Northwestern Mutual’s 2024 Planning & Progress Study, nearly 8 in 10 American millionaires are self-made.
Most parents probably dream that their children will grow up to join the ranks of the monied class and avoid the shackles of financial insecurity. However, they might not consider that the things they do and don’t do when their kids are young can greatly impact their odds of success as adults.
Start Teaching Financial Literacy Early — and Never Stop
The path to wealth is paved with financial literacy — and the sooner parents start laying the foundation, the better chance their children will have of growing up to live seven-figure lifestyles as grown-ups.
According to the Institute of Financial Wellness, parents should break their children’s financial education down across three crucial stages of development — and they should make learning about money as fun and engaging as possible.
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Toddlers and preschoolers: Parents should prioritize teaching dollars and cents just as they do letters, numbers, colors and shapes. Fun, hands-on activities, like collecting coins in a piggy bank or jar, can introduce young children to the concept of money as a medium of exchange, just as they’re learning to read and count.
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Elementary school children: As kids develop and grow, so too should their financial education. Now that bulging piggy banks have shown children the cumulative power of saving, parents can begin teaching 5- to 7-year-olds the basic concepts of money management, like spending less than you earn so you have some left over in case of an emergency. It is also a great time to introduce the concepts of bank accounts, digital money and debit cards. At this age, some parents choose to incorporate apps like Greenlight, which can help teach financial literacy to children and even transfer their piggy bank or birthday money to supervised debit cards.
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Teenagers: This age is a financial finishing school for children approaching adulthood, when they’ll be bombarded with offers for credit cards, loans and investment opportunities that could empower them, trap them in debt or be outright scams. Teens should learn concepts like compound interest, revolving debt, credit reports and scores, taxes, paycheck withholdings, and employer benefits. Parents can make it fun by incorporating lessons into family games like Monopoly or by letting teens help budget for back-to-school shopping or trips to the grocery store.
Include Them in the Family Finances
Many parents keep their finances private and separate from their interactions with their children, who grow up thinking that bills, budgeting, borrowing, saving, spending and stressing out over money are things for adults.
Then, one day, they’re adults themselves and have no idea where to begin — and that’s a lousy start for kids who want to grow up to be millionaires.
According to NPR, parents miss out on key teachable moments by treating money as a taboo topic. Instead, they should consider bringing kids into age-appropriate discussions about money coming in, going out and being saved for the future, as well as money that’s being donated to charity and set aside for taxes.
Let Them Earn an Allowance
According to Forbes, the only way children can truly understand the concept of money is to earn some of their own. Paying an allowance can teach kids about respecting money, valuing financial responsibility and managing the lifelong trade-off of work for income.
Forbes suggested starting by dividing tasks into basic household chores that children are required to perform as contributing members of the household and those that are eligible for a monetary incentive. Earning an allowance can help children draw a connection between work and financial rewards, which can create a respect for money and a desire to save that can lead them to millionaire status.
Lead by Example
“Do as I say, not as I do” is a losing strategy for parents — especially where money is concerned.
According to the Carnegie Investment Counsel, parents can set their children on a lifelong course for wealth and financial freedom by living the lessons they’re trying to teach.
Parents who spend within their means, save consistently with every paycheck, invest for the long term, resist lifestyle inflation, avoid toxic debt, live according to a budget, and save and plan for major expenses are more likely to raise children who do the same than those who don’t but expect their monkeys to do something other than what they see.
