Many parents feel their kids will learn about money and investing when they get their first jobs or become independent young adults. But a better way to help your children understand earning, saving, and investing may be to teach them while they’re still young.

Developing good earning and saving skills can help your child eventually become a financially responsible adult. Model and teach the following behaviors, and your children will learn how to handle money with confidence.

Earning

Although many kids don’t get jobs until after they can drive or are at least 16, many still receive money in the form of allowances, gifts, or in exchange for household help. These early experiences with earning money can influence a child’s attitudes about earning and saving for years to come.

Many experts agree that allowances should not be given purely in exchange for chores. Instead, a “hybrid” system wherein kids receive a base amount of money weekly or monthly, plus additional money for additional chores or responsibilities, can help children learn money management.

Allowing children to earn or have money will enable families to discuss family finances. If children spend some of their own money, they will become much more aware of prices. They will also learn basic math skills; if they spend all their money on something, they won’t have any money left to buy other things.

Learning this will naturally lead to discussions about saving.

Saving

Adults have more freedom than children to adjust the “earning” part of their financial lives. Children, however, can learn about the importance of saving their money from a very young age.

Parents can choose to talk with their children about saving resources in various ways. For example, some parents might want to encourage children to save their allowance for a bigger or special item they want to buy in the future. Other parents may want to talk about different “savings buckets” in which you put money into separate piles or envelopes for various purposes. For example, one envelope has money to buy candy, another to give to charity, or another to “save for a rainy day.”

With older kids, parents can discuss the idea of allocation and how to think in terms of percentages. For example, suggest that your kids save a certain percentage of their allowance and wages, so they have spending money later. Encourage them to use a small percentage for instant spending on things they need or want.

Discussing saving will also help you raise the subject of creating a budget with your children. Explain how different things necessary in life have a cost and require money and that budgets must be designed to ensure all needs (and then wants) can be covered.

Encourage your children to set aside money for different purposes; they will naturally learn about making budgets and staying within them.

Investing

When your children have learned about earning and saving some proportion of their own money, the subject of investing will naturally introduce itself.

Open a conversation with your children about how much money they’ve saved. Explain that there are different ways they can use and invest their money so that it will grow and provide a return.

The most accessible place to start teaching kids about investing may be to help them open an in-person or online savings account. Introduce the subject of interest and how credit unions or banks will pay savers an incentive, in the form of a specific percentage rate, on whatever dollar amount they put in a savings or certificate of deposit account.

Parents can discuss different ways to invest money with older kids, including buying stock in companies through the stock market. Important stock market topics include ROI or return on investment (how much money you may be to make in addition to your original investment) and risk (what makes some investments riskier than others).

Experts agree that speaking with your kids about financial topics and their money resources and choices can help them learn financial literacy. It can also encourage them to form good financial habits, with your guidance, while they are still young.

In short, if you want a good return on your kids’ understanding of personal finance, the best thing to do is to invest some time and conversation into the process of their financial education.