Experts warn that telling kids ‘we can’t afford it’ may fuel lifelong money stress. This small wording change can make a big difference

It feels harmless. Even practical. After all, kids don’t need a breakdown of the household budget every time they ask for something. But financial psychologists are now saying this phrase can do more damage than parents realize.

Here’s why parents are cautioned to delete this phrase from their vocabulary, and what you can say instead to help your children understand financial literacy, and raise kids who feel empowered about money.

Money lessons start young

Kids form their core beliefs about money before age seven, say researchers from the University of Cambridge. (1)

Repeatedly telling children “we can’t afford it” can frame money as scarce, stressful, and out of their control — an attitude that may follow them well into adulthood.

Over time, this language can contribute to financial anxiety, shame around spending, and unhealthy money behaviors later in life.

“Instead of cutting off the conversation with an abrupt, ‘We can’t afford it,’ try saying, ‘We could do that, but we’re choosing to spend our money on these things instead, and here’s why,’” says Brad T. Klontz, a financial psychologist and certified financial planner, in an interview with CNBC. (2)

Why your word choices matter

Since kids begin forming their core beliefs about money long before they understand paychecks, utility bills, or mortgage rates, a child who grows up associating money with restriction and stress may swing in the opposite direction as an adult.

This can result in overspending once they finally have access to credit cards, loans, or disposable income. The emotional response becomes, “Now I can finally have what I never did as a child,” rather than making thoughtful, values-based financial decisions.

That mindset can fuel what experts call financial anxiety: a persistent sense of worry, guilt, or fear around money, even when someone is financially stable. Financial anxiety can show up as avoidance (not checking bank accounts), impulsive spending, chronic stress, or difficulty planning for the future. (3)

Importantly, Klontz notes that “we can’t afford it” is often not entirely true. In many cases, families could technically purchase by taking on debt, working more hours, or sacrificing savings, but they choose not to.

Explaining the choice in that manner helps children understand that money decisions are about priorities, not personal failure. (2)

Teaching kids about personal finances

Financial experts say parents don’t need to turn every purchase into a lesson, but small, consistent conversations can help kids build a healthier relationship with money.

Here are a few practical ways to avoid creating financial anxiety while teaching your kids lessons that can set them up for financial success:

Have conversations early and often

Money shouldn't be a taboo topic. Experts recommend talking openly and casually about everyday spending decisions.

That might mean mentioning roughly how much a home-cooked dinner costs, explaining why you’re choosing one grocery item over another, or discussing the full cost of a family vacation, not just the fun parts.

According to Parents.com, keeping these conversations light and matter-of-fact can help reduce fear and negative emotions about money. (4)

Give kids access to money

Allowances can be a powerful teaching tool when paired with guidance. Giving children a small, regular amount of money lets them practice saving, spending, and waiting.

Kelly Lannan, senior vice president of emerging customers at Fidelity Investments, told Parents.com that even children aged three to six can understand goals and progress when they can see it happen — for example, by watching money accumulate in a piggy bank. (4)

Make money visible and concrete

Because so many purchases happen digitally, kids often don’t see money changing hands. Experts recommend making money more tangible by talking through transactions.

Explaining trade-offs — such as buying something on sale so money can stretch further — helps children understand that spending decisions involve thought and intention, not impulse.

Replace “we can’t afford it” with values-based explanations

Instead of saying you don't have the money, experts suggest explaining why the family is choosing not to spend on specific items.

Parents can share that they’re prioritizing paying off debt, saving for a home, investing for retirement, or choosing more family time over working longer hours.