“Money doesn’t grow on trees.”

This is the nugget of wisdom that so many of us were handed as children, and often the financial literacy education ended there. A new survey by CreditsCard.com found that one in four U.S adults with children under 18 said their parents provided no money lessons as a child.

In the case of money matters, ignorance is not bliss, and what you don’t know can hurt you. Research shows that children benefit from learning about how money works, beginning at a very young age, with some schools stepping up to tackle the issue in the classroom.

How can parents teach financial wisdom to their own children in a practical way that will benefit them for their whole lives?

We’ve compiled a list of tips from money experts — many of whom are also parents.

Explain where the money comes from

“When you’re teaching your kids about money, it’s important to teach them where it comes from. Money does not just come from mom and dad’s wallet,” says Rachel Cruze, personal finance expert and the co-author of “Smart Money Smart Kids: Raising the Next Generation to Win with Money.” “When you work, you get paid. When you don’t, you don’t get paid.”

The key is to repeatedly demonstrate and demystify the relationship between work and money.

Preach the three principles: giving, saving and spending

“Once you’ve established that money comes from work, I recommend teaching your kids three basic principles when it comes to money — giving, saving and spending,” says Cruze.

“Giving is one of the most important of the three categories because you’re teaching them to feel the impact of helping others at a young age. That’s invaluable,” Cruze continues. “As for saving and spending, encourage your child to set aside some of their money to savings and some to spending each time they get paid. Remind them that once their money is gone, it’s gone. And yes, your kids will make mistakes, but it’s better that they make those mistakes under the safety of your roof.”

Have your child physically organize cash with three piggy banks

Kids (especially young ones) need tangible ways to understand abstract concepts, so it’s important to not just explain these three money principles, but give them concrete tools to practice them.

“Instead of just having one piggy bank for your child, get three, and label one ‘spend,’ one ‘save,’ and one ‘give’,” says Logan Allec, CPA and founder of the personal finance site Money Done Right. “Any time your child gets money — allowance, payment for completing a task, birthday money, etc., — encourage them to split the money up between all three banks. The key to this being educational is to allow your child to choose how they split the money, as well as what they do with it.”

This exercise is not only helpful in getting kids confident in money matters, it provides an opportunity for parents to have meaningful conversations with their kids about money management.

“Talk with them about both what they will do with their money as well as how they could have split their money up differently if an appropriate situation arises,” says Allec.”Ultimately, though, the decision should be up to your child.”

Our thoughts and beliefs about money have a massive impact on our prosperity in life.

Many of these thoughts are rooted in what we see, hear, and experience as children.

For parents who are concerned about their kids’ financial literacy, this video is what you need to watch regarding financial education for kids.

In this video, MBA, CPA, and Certified Financial PlannerTM, Ellen Rogin discusses about the surprising ways that parents should use to provide the best financial education for kids.

Watch it now to find out how teaching kids about money should be. Comment below to share with us whether do you agree!

Financial literacy for kids is about making sure that your kids are well-educated on effective ways to handle finances.

Teaching kids about money is a way of securing their future because it helps them to make wiser financial decisions.

Financial literacy for kids can be effectively taught through interactive games. Online games and board games such as Monopoly can be used to educate your kids on how to make, save and manage money.

Apart from games, parents could also educate their kids on financial management on their day-to-day life scenarios.

If you are keen to find out more about how to teach kids about money, watch this video now!

Via USA Today: We’re ditching cash. So how do we teach kids about money?

Doug Anderson discovered his kids’ interest in money started with the tooth fairy.

“They start learning a little bit about money because they start to accumulate some,” said Anderson, who owns a business media company based in Washington, D.C., and has four kids, aged 6 months to 9 years, including a 5-year-old who just lost a tooth.

The tooth fairy still largely operates in dimes, quarters or even dollars. But soon, given the lack of cash parents cart around, could it start to pay by Venmo?

According to a 2016 Pew Research Center study, 24% of Americans indicated they don’t make purchases using cash during a typical week.

And that’s made teaching children about the value of money, from how to count and pay with it, to how to save it, a particularly 21st century challenge.

“We’re vastly approaching that real time where’s there no cash,” said Neale Godfrey, of the Children’s Financial Network, a company she founded in 1989 to help teach kids and parents about money. “Our kids will look back on bills and coins as relics.”

Fifty years ago, the ATM was a novelty. Now, there are so many different ways to pay for things. We’ve still got plastic — a 2016 study from credit card processor Total System Services found 75% of consumers surveyed said credit or debit cards were their most preferred form of payment, with just 11% preferring cash.

But now there are also digital options, from Apple Pay to apps such as PayPal, Zelle and Venmo, which let you to send and receive money with a few taps on a smartphone.

For parents, this shift means rethinking how to teach kids about money.

Where earlier generations earned cash allowances or received money as gifts from grandparents to buy a toy or candy, today they may receive a digital gift — such as an iTunes gift card. At school, we don’t give kids lunch money. We just add funds to their school account digitally.

Robin Taub, a certfified public accountant and author of A Parent’s Guide to Raising Money-Smart Kids, suggests getting kids starting to think about money around the age of 5, or whenever they “start to express an interest or a curiosity” about money.

“That tangibility of feeling and handing over cash to somebody feels very real, that sense of loss which is hard to replicate when you’re using plastic,” she said. “You just don’t feel like you’re losing it or spending it.”

A world without cash isn’t a crazy notion. Look at countries like Sweden, a model for a cash-free world, where even churches have started taking donations via mobile app.

Image source: flickr

Bring out the bills

Godfrey of the Children’s Financial Network says the most important thing parents can do is not keep money a secret, but talk openly. “All they see us do with money is spend it. They don’t see us save, or pay bills or give to charity. Make money discussions a normal and healthy part of your life with your kids.”

Cash still carries value when it comes to teaching, Godfrey says. “We teach little kids to brush their teeth. We teach them to stop at a light. We teach them not to talk to strangers. We try to make it as visual as possible.”

For older kids, Godfrey suggests starting off with something real, like taking their money to a bank and opening an account. Then, you can flip to online elements like apps, but kids now have a sense “that it started out to be real.”

4-bank system

Learning about the value of money isn’t just about how many quarters are in a buck. It’s important to teach kids about planning as both physical and digital temptations to spend pop up.

“Kids will probably tell you that ‘you don’t understand,’ so come prepared with a planning story of your own – when you resisted buying something impulsively so you could save for something important,” Kurt Rupprecht, a financial advisor with Northwestern Mutual K Street Financial Group in Washington, D.C., said.

One way to encourage this is the 4-Bank System, where money kids receive is split between four “bank” jars: spending, saving, giving, and investing. “It’s a great way to teach children to plan and set aside money for different wants and needs, now and in the future,” Rupprecht said.

There are other digital services parents can consider for older kids to help them manage money. Greenlight is a debit card for kids, and looks like your typical credit card. However, parents control what stores can accept the card and receive alerts when a purchase is made.

“(Parents) had this desire for their kids to be smart with money, but didn’t have the knowledge or the time,” said Tim Sheehan, CEO of Greenlight. “These topics weren’t really being taught in school.”

Anderson, the father of four, said around the time of the tooth fairy’s visit to his kids, he started a banking account with each child to give them “an understanding about keeping (money) there and watching it grow.” His kids earn “semi-regular contributions” by completing chores or meeting other goals.

He also makes sure to put those accounts under their name to capture their attention when statements arrive in the mail. “It gives the kid a sense of buy-in to it, but it also discourages them from spending it.”

Anderson saw this strategy pay off recently when his two oldest kids wrestled with whether to purchase an Xbox video game console, even independently going online to find the best deal.

“They can feel a sense of pride and ownership they have this money in the bank and they can see it right there.”