We’ve all heard the old adage, “Money doesn’t grow on trees.” It was likely said to you often, possibly when you asked for a new pair of sneakers or when your weekly allowance was handed over—if you got one. But beyond that, how thorough was your financial education when you were growing up? At what age did you get your first checking and/or savings account? Did your parents teach you about credit? Budgeting? The stock market? Investing?

According to youth.gov, 18% of 15-year-olds surveyed stated they received no education in fundamental financial skills, like building a basic budget and how to comparison shop, either at home or in school. On average, high school seniors scored 48% on a financial literacy exam, pointing to the need for better (and more) financial education in schools and at home. According to a 2019–2020 Next Gen Personal Finance Report, under one in five high school students nationwide are required to take a personal finance course as part of their curriculum. If schools aren’t teaching financial literacy, who will? For this, we must turn to parents (or grandparents).

Child development studies consistently show the benefits—and abilities—of our children to pick up new languages, comprehend math and science concept, and role-play behaviors when exposed at early ages. So, what are we waiting for? In a 2020 T. Rowe Price survey, 41% of parents surveyed were somewhat to very reluctant to discuss financial matters with their kids. But why? Perhaps because key to teaching your children about financial literacy and instilling good money habits is your own ability to comprehend and communicate these skills and concepts—plus, the example you’re setting with your money habits.

According to the Federal Reserve Bank of New York, average household debt in Q3 2020 was $145,000; this includes mortgages, home equity, auto loans, and credit card debt. According to the Fed, 44.7 million Americans have some student loan debt with an average of $32,731 per borrower. With these numbers, it’s clear that financial literacy is key to helping adults manage their debt. Start teaching them young and continue for as long as you can to set your child up for future success when managing their finances in adulthood.

How do you know where to begin? We’ll help you get started with our tips on how to teach your kids—or grandkids—about money and finance below.

1. Plan a curriculum. There are tons of free online resources to do this. The FDIC has a program titled Money Smart for Young People with guides for both educators and parents. You can download PDFs for different age ranges with pre-built activities and lessons, or you can use the educator’s guides to build your own curriculum based on basic concepts.
2. Start with basic concepts, like where money comes from and how to recognize and count money, and build up to more complex ones. It’s important to know what you don’t know and educate yourself first. YouTube is a great teacher for us adults!
3. Regularly reinforce the three principles of giving, saving, and spending and the concept of want vs. need. These sound so simple, but they are the basis for almost all financial decisions we encounter in life. Very importantly (and often overlooked), encourage charitable giving from an early age. Bullying is a prevalent problem in our schools and society today. “Teaching children emotional literacy and developing their capacity to take the perspective of others are key steps toward collaboration and civility; they are indispensable steps towards preventing aggressive and bullying behaviors,” Mary Gordon writes in The Roots of Empathy. These lessons early, consistently, and often can help your child become more empathetic and can ultimately help them be more successful in their future careers and relationships.
4. “Hire” your kids to do chores outside their normal and expected daily or weekly tasks, then require them to contribute to the household bills with their “earnings.” You can start this at a very young age, as even small children are capable of picking up their toys (and by extension, a room) and helping sweep or dust. This also gives you the opportunity to teach your children how to read a bill and understand payment due dates and explain a mortgage.
5. Include your kids in family budget talks, especially for 1) big purchases, 2) day-to-day spending, and 3) necessities, and bill paying. Aside from the financial concepts, this introduces them to these same crucial life skills.
6. Decide on something to purchase as a family and make saving for it a project for all members. Everyone can be responsible for helping comparison shop, adding to the collective savings pool, and purchasing the item when the required savings has been met.
7. Download an app, like PiggyBot, Rooster Money, or Bankaroo. This gives you the opportunity to lean into your kids’ primary method of entertainment since children are becoming more and more digital savvy—and device-dependent. Look into different apps features and decide what works best for you and your family. Here’s a resource that breaks down the pros and cons of these apps.
8. Make the most of an allowance, if you choose to give one. You can require additional chores or household responsibilities to provide an allowance—you can even consider including cognitive tasks with an age-appropriate financial focus (e.g., helping pay bills online, creating a grocery list with a budget included) for even more bang for your buck! Then, reinforce that allowances aren’t just for fun “wants.” Be clear about what the allowance should cover: Is it for candy or snacks? New clothes? Gas? Car insurance? Computer games? Fun with friends?
9. Teach them about opportunity cost—the principle that buying this one thing may prevent you from buying that other thing. You want to buy that skateboard now? You may not be able to go on that trip with your friend’s family over the summer.
10. When your child asks for money (or more money), use it as a teachable moment. Did they blow all their allowance on a “want” and now need it for a “need”? Or are you at Target and your child is asking for a new toy? When appropriate, don’t cave. Allow negative repercussions sometimes—and within reason—to really let the lesson land. These are often the most impactful moments when it comes to learning about and managing finances.
11. Help your child open a bank account—ideally, both a savings and checking account—and give them the responsibility for managing it. Teach them about basic budgeting and money management through this outlet. Plus, you can link your bank accounts and keep your eye on spending to address issues or deliver praise when necessary.
12. Teach your kids about credit and credit cards. With an average of $8,089 of credit card debt and the lure of easy spending, credit cards can quickly become dangerous and a way of life for some. Discuss the pros and cons of credit cards and show them how to monitor their credit score. When you’re ready, you can add your teen as an authorized user on your card and make them pay their charged balance in full each month.
13. Encourage your child to get a job and back them up with resources, education, and moral support in their job search, interviews, and when learning to balance their work life, school, and personal time. Not only does this help with their financial literacy, but you’re also helping teach more valuable life skills.
14. Show them how to put their money to work for them by exploring investment options and teaching them about compound interest. They can try out index funds and stocks, CDs, or open an IRA.
15. Introduce the concept of long-term planning. Pick something your child is striving for in the more-distant future, like a car or college, and get them budgeting, planning, and saving NOW.
16. Share your past mistakes with money and continue bettering your relationship with money. Your kids are watching and constantly absorbing your behavior, values, and attitudes.

Talking, teaching, and demonstrating the value of money and the importance of effectively managing your finances is one way to leave a financial legacy for your children—and generations to come. There’s no better time to start than right now.

“An investment in knowledge pays the best interest.”–Benjamin Franklin

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