At first, the concept of money is foreign to children. They are given everything they need and want, and then suddenly they’re told that as they get older, there is work involved, exchanges. That’s why it’s important to start kids on the path of financial learning as early as possible. As soon as they’re able to keep coins out of their mouths, they’re able to learn about the value of money, and how it can work for them.

Lead by Example

This is a rule of thumb to live by to help children form any healthy habit: nutrition, exercise, communication, relationships, sleep, and of course, finances. By the time kids are 7, they have started to develop a sense of what money habits mean to them.

• Use cash as often as possible
• Allow them to watch you balance the checkbook
• Don’t argue with your partner about money in front of them
• Let them help you figure out unit price, and then choose appropriately
• When it happens, explain impulse buys, and then do your best to put the item back

Give Fair Allowances

The earlier on kids learn that they will earn money for a job well done, the sooner they will be doing a good job! Be age appropriate when it comes to assigning tasks, kids as young as 3 can help take care of pets and picking up their own toys. As they get older, assign more complex tasks and make sure they feel comfortable asking you questions in case they aren’t sure what to do.

• When they’re little, let them save their money in a clear jar. The transparency will help them clearly see their earnings
• Pay them with a gift card. Help them learn about balances on cards and keeping impulses at bay to wait for what they really want. A gift card will provide more intention of what to buy and create less impulse purchases.
• Provide the opportunity for extra work. Your family may have its regular chore schedule but on occasion there are tasks that come up that are attractive for them to accomplish and for you to pay them for.

Teach Fulfillment

We live in a society that runs on disposable items. There is no longer a lot of value in fixing an object instead of throwing it away and buying a new one. Teach your child how to repair things that can truly be repaired, and to find contentment in the things they already have. Teenagers naturally want the next, biggest thing – to keep up appearances with each other. But, you can lead by example by being grateful for what you already have and teaching them to do the same so they don’t feel like there is a hole that needs to be filled with “stuff.”

Teach them to be Cautious of Credit Cards

Over half of the population in the United States carries credit card debt. Simply put, they are living, from month to month, outside of their means. When this happens, it takes a lot of extra work to get above water, and really make your money work for you. Teach teenagers that although credit cards are appealing, they are, in essence, enslavement to financial organizations for years to come. Paying cash, as often as possible, and being patient enough to save for what you really want, will help them steer clear of credit card debt so they can thrive in the future.

Encourage their Creativity

Kids are energetic and creative by nature. Help them learn how to make money by harnessing these attributes. Young entrepreneurs turn into adult entrepreneurs, so put the bug in their head now. 

• Walking neighborhood dogs
• Pet sitting
• Shoveling driveways
• Raking leaves
• Cleaning out garages and basements
• Helping a soon to be bride write out invitations and thank you’s
• Lawn mowing
• Starting websites
• Making crafts and selling them on Etsy
• Social media consulting
• Re-selling quality items 

Open a Bank Account

One of the first steps in becoming an adult is getting your own bank account. If possible, match their initial investment into the account as a reward. Go over monthly statements with them, and help them review their account online to be sure they understand interest, penalties, withdrawals and deposits. When they’re ready, branch off into a checking account and debit card. Help them instill pride in a growing bank account and talk with them about appropriate objectives for saving: college, a vehicle, their own apartment, etc.

Being consistent with positive and transparent messages when it comes to finances is a proven method in helping kids gain financial responsibility.