The One Phrase Parents Should Never Say If They Want Their Kids to Be Good with Money

Raising financially responsible children goes beyond giving them an allowance or teaching them how to save—it starts with the way parents talk about money at home. According to self-made millionaire and financial expert Ramit Sethi, one common mistake parents make is using negative language around finances. A particular phrase, often repeated in many households, can create a damaging mindset that follows children into adulthood: “We can’t afford it.”

How This Simple Phrase Can Impact a Child’s Money Mindset

Sethi, who has interviewed over 1,000 couples about their money habits, explains that many adults who struggle with financial confidence grew up hearing this phrase repeatedly. Even after achieving financial stability, they still carry a scarcity mentality, constantly worrying about money, fearing big purchases, or feeling guilty about spending. Rather than teaching children about financial priorities, saying “We can’t afford it” enforces a mindset of limitation and helplessness.

Parents may not always be aware, but children pick up on money habits early, and their perception of financial security is shaped by what they hear at home. When the conversation around money is consistently framed with stress or anxiety, children may carry those worries into adulthood.

What Parents Should Say Instead

Instead of shutting down a discussion with “We can’t afford it,” parents can take a more constructive, values-based approach. For example, if a child asks for an expensive toy or a treat at the grocery store, a parent might say, “We choose to spend our money on things that are more important to our family right now.”

This slight shift in wording transforms the message from one of financial hardship to one of intentional decision-making. It teaches children that financial choices are based on priorities rather than limitations. Additionally, not every financial decision requires an explanation. Sethi suggests that sometimes, a simple “No” is enough to set boundaries without introducing financial stress.

Involving Kids in Financial Decisions

Beyond language, Sethi strongly encourages parents to involve their children in financial activities from an early age. Simple practices can help familiarize them with money management without making it overwhelming. These include:

– Letting kids watch as parents pay bills online
– Allowing them to click the pay button for household expenses
– Teaching them what rent and utility bills cover
– Involving them in planning major purchases or family vacations

By seeing financial decisions in action, children begin to understand budgeting, trade-offs, and priorities in a hands-on way. Learning through experience is one of the most effective ways to develop financial literacy.

Building a Positive Relationship with Money

The ultimate goal is not just to teach kids about money but to foster a positive and confident approach to financial decision-making. Sethi, who also hosts the Money for Couples podcast, emphasizes that financial literacy should be an ongoing part of everyday life rather than a stressful or taboo subject.

By replacing fear-based language with constructive money conversations and hands-on learning experiences, parents can help their children develop strong financial habits. The way we talk about money today plays a significant role in shaping how the next generation will handle their finances in the future.