It's never too early to start talking about money with your kids, says Stephen Rhodes, a former teacher, father of four, and a CFP and managing partner at Strategic Partners Wealth Management in Creve Coeur, Mo. "Begin by explaining to them why you work -- to make money for the family," he says. Explain to them the reality that the items they use each day all cost money, and you must work to make and save enough to make sure all things are paid for."
The trusty piggy bank is a good tool to use to help children learn to save, or you can choose to open a bank account in their names. "When children are 5, 6 and 7, they can't really understand the idea that one day something may happen, and you may need to rely on your savings," says Cecere. "But if somebody has a habit of saving and they always have, they will get that when they need it."
Rhodes suggests using three separate piggy banks for each child and labeling them "give," "save," and "spend." When you give them an allowance, have them divide their money into thirds to learn the importance of all three.