Teaching kids about the value of money may have to be one of the most challenging parts of parenthood. The first question perhaps would be when is the right time to teach them about money. I’m a parent myself to two schooling kids so this topic hits me home hard.

Getting your child to sit down and discuss about money would perhaps be a challenge in itself. At a young age, children (perhaps) only know that money is a very powerful thing, being able to get you anything you want in a store or restaurant. But then again, children are much more observant and intelligent, absorbing more than we think they do. That is why teaching them about the value of money is a very critical matter because their perception and handling of it determines their financial status and capacity in the future.

Perhaps the best way to teach your kids about money is by setting as an example. Kids are very aware of their surroundings even when we don’t tell them so teach them subtly by practicing restraint with your purchases. Buy only what is necessary and within your budget. This way, your kids will see that money should be used wisely, buying only what is important like food and other basic necessities.

Don’t spoil your kids. Or at least keep the spoiling to a minimum. Even if you can afford to, avoid giving your kids everything they want, every time they want to. They might think money is ever flowing in your pockets and they can have anything they want, anytime they want. No one else but you will be carrying the burden later on. Buy the essentials first and when you have a little extra, you can treat your kid to a candy, ice cream or a small toy after. But don’t do it every time you have spare cash, too. Always set aside money for savings.

When giving your kids allowance for school, give only what is enough for that day. That means give him/ her enough money to buy lunch and maybe some snacks. Better, pack a lunch or snacks for your kid to school. This way, not only can you save money, you know your child is eating clean and healthy because you yourself prepared it. If he/ she has extra allowance left at the end of the day, teach your kid to save by keeping a piggy bank and put in a coin or two everyday. This will motivate them to save more especially when they see the coins start to pile up.

Money is Not Free. At the appropriate age, teach your kids to earn for the money they want or need. If for example, they want to buy something a little expensive that is out of your budget, let them do certain chores and pay them for their work. This way, the will realize that money is not free or endlessly flowing, that one has to work in order to get money. This way too, they will learn the value of money and learn how to handle it more carefully.

What is the right age to teach kids about money? The answer varies, depending on each parent. But 2 or 3 is definitely not the answer. Personally, I started giving my kids allowance when my little boy turned 7 and he and his little sister started having their lunch in school. Everyday, I give them enough money for the day and put the extra in their savings, encouraging them to be more careful in their spending so they will have bigger and bigger savings each day.

There is no guaranteed system in teaching our children about money. Each parent has different teaching techniques as well as each child has a unique pace in learning. The most important thing is to “let kids be kids,” let them enjoy their childhood first and not enforce or pressure them into something they’re not ready for yet. And when the right time comes to teach them about money, nothing beats practical teaching, practicing and setting an example for everything you teach them, money and everything else. This way, you don’t even have to lecture them, because they will follow what they see in their parents.