If you’re planning to pass wealth down to your children or grandchildren, don’t wait until it’s time to draft the will. Financial literacy, budgeting skills and a healthy mindset around money are critical tools that should be taught early.
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Here are seven important financial lessons, according to financial and estate planning experts, to teach your kids if you want to leave legacy wealth.
Teaching kids the basics of budgeting and saving isn’t just practical — it’s transformational. It shapes how they view money, work and responsibility, according to Jason Hester, managing partner at Balefire Wealth.
He recommends a simple three-bucket allowance system — spend, save, give — to introduce “the value of trade-offs and delayed gratification, helping children see money as a tool, not a toy.”
Hester also encourages age-appropriate conversations around household budgets, shared goals, and the cost of choices.
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Budgeting is also key to financial discipline, according to William London, an estate planning attorney and partner at Kimura London & White LLP. “Often, I counsel clients that the benefit of an inheritance depends on the next generation being able to handle it with financial prudence. Without financial discipline, large inheritances are quickly lost,” London said.
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In an age of instant gratification, young people must learn self-control when it comes to credit, Hester said.
“Teens must learn the true cost of debt and the implications of borrowing before they are handed a credit card or student loan,” he said.
He guides families to use controlled tools to teach how credit works, such as adding a child as an authorized user on a parent’s card.
In the estate planning process, London has seen poor credit scores or high debt loads undermine a young adult’s ability to build wealth, even if they come from a well-off family.
According to Hester, “One of the greatest gifts you can give your children is the understanding of compound interest.” He suggests parents use simple, real-life investment projections to show how small, consistent contributions made in youth can yield exponential results over time.
However, “it’s not just about money,” he said, “it’s about shaping the kind of mindset that sees risk, reward and responsibility through a generational lens.”
