You might be surprised at how early you can start helping your children learn about money. The important thing is to adapt teaching strategies so they are age-appropriate, and so that your children can learn as they grow.

First: Talk about Money in Your Home

While my parents occasionally brought up the subject of money, it was not something often discussed in the home. If you want your children to be comfortable with money, it is a good idea to talk about finances in your home.

You don’t need to detail your own finances, but make it a point to talk about how you save, how you donate to charity, how you plan for retirement, and discuss the merits of different purchases before you buy them.

We make it a point to talk about our quest for good value, and debate whether or not we want to buy certain things — as well as talk about charitable donations and our investing efforts — when our son is around. We even include him sometimes. It helps your children to see money principles in action.

Teaching Toddlers and Elementary School Children

Visuals are important for young children. It helps to have different envelopes or jars for money that fulfills different purchases. You can put pictures of items on the containers, helping them visualize what the money is for, whether it’s saving for college, donations for others, or a short-term goal like buying a specific toy.

Encourage your child to save up for certain items. Make sure, though, that you make the process achievable within a few weeks. For younger children trying to save up $15 for a toy, it doesn’t make sense to have them toil away for three months. Instead, put together a goal chart that allows them to reach their goal in a more reasonable amount of time, and that allows them to track progress with stickers.

Older children with more potential for earnings/allowance can have bigger, longer goals. But when they’re little, you want them to be excited about earning money, and seeing the effects of saving up.

Pre-Teens

My son is 10. We’re teaching him a little bit about investing right now, and the power of compound interest. My son contributes to his 529 alongside us (we have instituted a matching program). We’re also teaching about the downsides of debt. He recently wanted an item that he didn’t have the money for. I let him borrow money — with interest. What he borrowed amounted to three weeks’ worth of allowance. It took him five weeks to repay the debt, since he was required to continue to pay his tithing and put money into savings. He couldn’t buy anything else until that debt was repaid. The lesson was quite striking. Since then, he has had no desire to borrow.

You can also start talking about priorities, and choosing to spend on what’s important. Encourage your child to avoid spending on things that they don’t think are very important, and remind him or her that spending on something unimportant now means that it will take longer to save up enough to buy what he or she really wants.

Teenagers

Teens can start to learn more about investing, and about the importance of long-term financial planning. Encourage your teen to open an IRA when he or she gets a first job. Use online games to learn about investing and saving for the future. This is also a good time to open a joint checking account, and teach your teens how to manage money, budget, and track their spending.

By this time, if you have been laying a foundation of saving, and avoiding debt, your teens should already be well on the way toward better money management.

How do you instill good financial values in your children?