Psychologists explain why parents should not say ‘we cannot afford it’ to kids. Parenting lessons on how to teach money's value to kids

Teaching children about money has become more important as families continue to deal with rising living costs and financial uncertainty. While many parents try to protect their children from financial worries, psychologists say the words used in everyday conversations can influence how children think about money for years to come. Rather than avoiding the topic, experts believe honest and age-appropriate discussions can help children build healthy financial habits from an early age.

According to the American Psychological Association (APA), money is one of the topics many people avoid discussing with family and friends. However, psychologists say children begin developing their beliefs and attitudes about money during childhood. Talking openly about finances and setting a good example through responsible money management can help prepare them for future financial decisions.

The APA's Stress in America survey has consistently found that money remains one of the biggest causes of stress for adults. Financial pressure is also affecting families on a larger scale. The 2025 American Family Survey by the Wheatley Institute at Brigham Young University, the Deseret News, and BYU's Center for the Study of Elections and Democracy found that more than 70% of Americans believe raising children has become unaffordable.


Jeremy Pope, Professor of Political Science and a Wheatley Institution Fellow for Constitutional Government at Brigham Young University, said, "The cost of family life is not just a culture war talking point. It is the defining challenge for American families. Nearly half of Americans rank family costs among their top three concerns, and when we include other economic worries like job scarcity and work stress, two-thirds identify economic factors as primary family challenges."

Why experts discourage the phrase 'we can't afford it'

The APA says parents often respond to children's requests by saying, "We can't afford it." While it may seem like a simple way to refuse a purchase, psychologists say the phrase can leave children confused. Younger children may worry that their family cannot pay for essential needs, while older children may realise the family is choosing not to buy the item rather than being unable to.

Instead, experts recommend saying, "That's not how we choose to spend our money." This teaches children that spending decisions are based on priorities and values instead of simply whether money is available.

Parents can also say, "We can't buy it now, but we can talk about how you can save for it, or you can put it on your birthday wish list." According to the APA, this helps children practise patience, plan for future purchases and understand delayed gratification.

Simple habits that build financial responsibility

The APA encourages parents to involve children in family spending plans instead of avoiding money conversations. Saving together for a family goal, such as a holiday or a new computer, can also help children understand how money grows over time. Experts recommend comparing prices before making a purchase so children learn the importance of getting good value.

The APA also suggests giving children an allowance to build financial literacy, but advises against linking it directly to household chores. Instead, children can divide their allowance into spending, saving, donating and investing. As they grow older, prepaid cards can introduce them to managing electronic money. According to psychologists, these everyday experiences, combined with regular conversations about money, can help children develop responsible financial habits that last into adulthood.