By Winnie Sun
Winnie SunWhat mom doesn’t want her child to grow up to be smart about money? It’s never too late for a kid to learn, but the sooner you start teaching–and modeling–wise financial behavior, the better.

Research shows that money habits often are set by age 7, so introduce your children to money as soon as they can count.

Here are some methods I use with my own youngsters:
*Introduce your child to the concept of using a shopping list and have him help you find items on your list. Tell her why you shop at discount stores. As she gets older, have her calculate the unit price to figure out what item is the best deal. Make a game of finding items on sale and show him how to compare prices on national brands with those of store brands.

*Tailor lessons to your child’s age. Let preschoolers sort coins, so money becomes concrete and finite to them and not something that credit cards can make seem abstract and unlimited. A slightly older child can learn money awareness by receiving and managing an allowance. You might want to set up your teenager with a parent-monitored Amazon Teen Account. Also teach your teen how to spot an Internet scam and never to share personal information online.

*Help your child find ways to earn the money. Develop a list of chores he can do for pay, encourage her entrepreneurial spirit (lemonade stand, anyone?). Then let those little income-earners make their own spending decisions. They can learn from their inevitable mistakes.

*Involve your children in major family purchases. Show them the importance of doing research before buying a big-ticket item and let them know the factors that go into your decision-making. Teach them how to comparison shop for the best price on an item they want and model for them the importance of spending within their means. Sure, you would love that $120,000 luxury sedan but you’re going with the $40,000 SUV because that’s what you can afford. Discuss the difference between needs and wants.

*Provide your child with an understanding of what things cost and how to make choices. For example, “We’re saving for a family vacation to Hawaii, so we’re not eating out much now.” My 8-year-old and I review his college savings statements every time they come in. Although he doesn’t fully understand what going to college means, he does comprehend that saving money takes time, the stock market will make his money go up and down and that important financial goals need to be planned for early.

*Assist your children in keeping track of their spending. Use a whiteboard, a spreadsheet or even a small notebook to understand where their money went each month. We have a budget worksheet on our website that you can use.

*Consider giving your college-bound teen a prepaid debit card instead of a credit cards to limit the damage he can do while learning to use plastic wisely.

Winnie Sun is the Managing Director and Founding Partner of Sun Group Wealth Partners, a trusted award- winning financial consulting firm providing financial planning services to small business owners, senior executives, celebrities, tech elite, and established families throughout the West Coast.