As a child growing up, I wasn’t taught much about finances or money. Luckily, I was a natural saver and I didn’t accumulate large amounts of credit card debt once I left the nest. I inadvertently learned my frugal habits from watching my single mother work hard to provide for me. My money lessons were unintentional.

Now that I have two children of my own, I don’t want to leave the fate of their financial success to luck. If you’re a parent like me, you’ll also want to make your children’s financial education intentional and a priority.  

Check out my list of 8 ways to teach your kids good money habits below:

1. Cultivate A Good Money Mindset

Don’t pass on your negative feelings and insecurities about money to your children.  Do your best to avoid using phrases like “we’re broke” and  “we don’t have any money”. Instead, say things like “that’s not a priority right now” or “that’s not in our budget”.  If you can’t afford something or don’t want to spend money on an item, explain to them that you have other money commitments. Show them how to prioritize their wants vs needs as opposed to using limiting words.

2. Be Real But Remain Positive

Don’t lie to your kids about the family finances or pretend to have more money than you actually have. Be real with them about the state of your finances so that they understand how money works. If your financial ship is sinking, don’t smile and tell them everything is ok (but don’t panic and give them anxiety). Take advantage of different opportunities, even the bad situations, to teach them lessons about money management.

3. Prioritize Quality Time & Experiences Over Material Things

Don’t buy your child everything (even if you can afford it). We all want to give our children the very best and see them happy but giving into their every whim can do more harm than good.You don’t want to raise entitled children who eventually turn into entitled adults. Show them that having the best is not derived from acquiring material things. Demonstrate through leadership that your attention and the time you spend with them are worth far more than the things you can buy them. This will help them develop a strong sense of self-worth outside of materials things. Don’t spoil them with items, spoil them with love and attention.

4. Involve Them In Family Budget Meetings

Involve your kids in the family budget meetings. Include them in discussions on how you intend to save or plan for the next family vacation or big purchase. Show them what it takes to run the household and that the money for vacations, clothes & trips out to eat don’t grow on trees. Help them understand what it takes for Mommy and Daddy to provide them with the life they live.

5.Create A Mini Economy (& Help Them Create Their Own Budget)

Do you give your children an allowance or do they have a job where they earn money? If so, help them create a budget for their income. If possible, give them more ways to earn money by doing extra work around the house. When it comes to purchases or things they want outside of the family budget like toys, video games or expensive clothes, require that they use half of their own money to pay for it. This will help teach them how to delay satisfaction. They will appreciate and value the item much more if they have to use their own money to purchase it.

6. Build Their Entrepreneurship Skills

Show your kids how to build their own small businesses and how they can earn additional money by providing goods and services. Help them develop their business strengths and follow their interests. Teach them that if they can provide value to someone through an item or service, they can make money. For example, have them sell water at the local park on a hot summer day or help them start a car wash service (don’t forget to deduct your water expenses from their profit!). 

7. Set Them Up With An Investment Account

If you’re already adequately saving for your own retirement, open up a guardian or custodial investment account for them. You can put away as little as $10 – $15 a week in the account and have it grow passively over time. This is a great way to give them a head start in investing and growing assets. The custodial account is under your control until they turn 18 or 21 depending on the state. Remember, any account in your child’s name will be considered their asset when applying for financial aid applications for college.

8. Talk About Debt

Have specific conversations about credit card debt and student loan debt before you send them off to college. Have them understand the importance of not buying things on credit and racking up high debt before they graduate. Talk about your experiences with debt and the importance of having good credit.

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One of our main duties as parents is to prepare our children to be independent adults in the real world. Giving them the right tools and guidance on how to earn, spend and manage money will set them up for ultimate success.

It’s never too early and it’s never too late to educate your kids about money and instill in them good financial habits. Give them the head start you wished you would’ve had on the path to wealth.

What are you currently doing to prepare your kids for financial success?