Teaching your kids about money early in life can help them to learn healthy financial habits that'll last a lifetime. The more knowledge they know, the better they can make monetary decisions, whether it's buying a toy they want or saving for college. But it can be a tough concept to explain.

With so many Americans already suffering from financial stress of their own, the idea of passing on knowledge to your own children can seem even more daunting. But, it's never too early to start teaching them the fundamentals of finances. Here are some tips and concepts for talking to your kids about money—from toddler and beyond.

Teaching young children

Kids are very adept at picking up both verbal and nonverbal cues about how their parents are handling the finances at home so it's important to keep that in mind as you bring up finances

Be mindful of discussing money out loud

If you spend time worrying about money or bickering with your partner about upcoming bills at home, kids are able to pick up on the stress you're feeling. For many children, their attitudes towards money later in life are mostly formed by the time they're 7 years old.

That means that your little ones are not only learning how you interact with money but are forging behaviors they'll likely continue for years to come. While it's okay to discuss money around your children, try to pass down positive attitudes you'd like them to adopt, not ones you'd like them to avoid.

Never too early to teach savings

Saving as an adult usually looks like a separate bank account you transfer money to each month. For kids, money is a lot more visual.

The best way to help them understand the concept of saving is to use a jar that lives in a visible place, so they can watch money being put away and spent at a later date. If they get an allowance or a gift, show them how to put savings away first.

Buying and selling

In addition to saving in a common space at home, children are also learning at an early age how to exchange things of value. Use this as an opportunity to show them how they can exchange money for goods and services.

You can trade helping to pick up their toys for extra play time later or show them how the money you're saving in the living room can be used to buy groceries or things for the home.

Preteens

Allowances

Many parents start offering allowances as their children start to enter middle school. Instead of giving your kids an allowance just as a weekly or monthly spending stipend, consider using it as a way for kids to earn it as a reward in exchange for doing chores.

An allowance can be a flexible amount that increases as kids take on more chores. Teaching the value of a dollar is an age-old concept, but it never stops being relevant.

Understanding needs vs. wants

For many preteens, this is the first time they start to recognize that others may have more than they do. This is the perfect age to start explaining the difference between wants and needs.

When you're in the store and your children are asking for a new video game or piece of clothing, instead of just tossing it into the cart, talk to them about whether it's something that's really important to them or if it's an impulsive financial purchase.

Understanding the difference between wants and needs can help kids make sound financial choices later in life.

Larger savings plans

By the time your kids are in middle school, they likely have a fair understanding of how money works and their opinions about how to spend and save are already starting to form. Instead of letting children use their entire allowance to make big purchases, offer to match their savings up to a certain amount—similar to a 401k with an employer.

Teens

High school years are the final step before your kids make it out into the world on their own. Their financial fundamentals are well underway and it's time to help them start learning how to make and use their own money.

Encourage summer jobs

Teenage years are a great time for kids to start finding a summer job to supplement their allowance or gifts that they get throughout the year. While the familiar summer jobs, like working at grocery stores or retail, are still popular, there are many opportunities for older kids to make an income online or by getting entrepreneurial on their own.

Use a summer job not only as an opportunity to start the conversation about budgeting and finances but also about the responsibility of earning money and saving it.

Saving for college

With student loan debt on the rise, taking on big college loans can seem scary. Talk to your kids about how they can start saving for college while they're still in high school and use the money they're earning from a summer job to get a head start. You should also educate them about how loans work and the eventual payback process so that they understand borrowing money now means you could pay more later.

Keep the conversations going

Although they can be difficult, conversations about finances are important to have with your high school-aged kids. Before they leave for college or jump into the workforce, helping them understand their own relationship with money can help them succeed both when they first make it out into the world and for decades to come.

Encourage them to ask questions when it comes to money and create a safe environment where they can come to you about it.

No matter how old your children are, it's important to show them that a strong understanding and relationship to their personal finances can help them succeed later in life. This starts with passing on positive behaviors for them to follow at a young age and then having financial conversations with them as they get older.

Learning about money is an ongoing pursuit and there are lessons to be learned at every step of the way.

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