More than a dozen Mercer Advisors parents let us in on the financial lessons they’re teaching their children.

It’s Never Too Early to Consider Your Approach

This isn’t something I’m teaching yet because he’s still so little, but when I was growing up, my dad constantly talked to me about these three things:

1. Live only within your means.
2. Do not get into credit-card debt.
3. Begin contributing to a Roth IRA as soon as possible.

Kristen Comeau, Regional Vice President and mother of one (age 1)

Define Needs Versus Wants

One challenge my wife and I face is the constant questioning from our kids: “Why can’t I have this?” “Why can’t I have that?” In return, we try to frame many conversations around purchasing items based on needs and wants. By evaluating both, they learn that they can feel secure in meeting all their needs first, and be comfortable in not getting all their wants.

We also try to establish a sense of awareness of their actions by talking to them about the use of scarce resources like energy and water. We discuss how leaving lights on in their rooms impacts electricity costs, fossil fuels, and climate change, and we have the same conversations about leaving water faucets on and how precious fresh water is.

Bennet Thonakkara, Sr. Wealth Advisor, Director, and father of three (ages 11, 7, and 4)

Help Kids Discover the True Joys of Life

My husband and I knew early on that we wanted our children to realize that the joys of life should come not from “stuff” but from relationships and helping people. When our children were in elementary school, our family tradition was to request no gifts at their birthday parties. Invitations would read: “Your presence is the best present of all. If you would like to bring a little something, we’re accepting donations to XXX.” One year, we were able to sponsor the setup of a special book: now children all over the world can order a Cam Jansen Braille book from the Foundation for the Blind in Arizona.

Susy Gibo, Sr. Regional Sales Associate and mother of three (ages 17, 15, and 13)

Save, Give, Spend

When my youngest was little, we set up three jars labeled Save, Give, and Spend. She would get an allowance every week and be required to put 10% into Save, 10% into Give, and the rest into the Spend jar. If she wanted to buy something small, she would use the money in the Spend jar. If it was a large purchase, she could use both the Spend and Save jars. I told her I would pay a percentage—say, half—of a large purchase and she would have to save up for the balance. The best part was letting her pick her own charity. This led to a lot of conversation about discovering a need and taking an interest in giving to meet that need.

Jamie Block, Sr. Wealth Advisor, Director, and mother of two (ages 20 and 12)

Consider College Plans and Expenses

We’ll cover half of the tuition cost for a four-year school anywhere in the nation, using money saved in our children’s CollegeAmerica® 529 plans. If additional funds are needed, they’ll pay for it themselves. If funds remain at the end of four years, it’s theirs to keep and spend as they wish.

Matt Cook, Managing Director and father of three (ages, 14, 11, and 6)

How to get started:

Many children are visual learners, so it’s best to have a real-life example in front of them. Consider how your child might be able to visualize money in a tangible way. Do you want to teach the Save, Give, Spend method? Do you want to provide a piggy bank or create a pillow bank (i.e., pillow fort) in the living room? Can you create a sticker board to reward certain habits?

Ask your kids to write down a number for what they think something costs, then align it to the amount of money that’s accessible to them. For example, ask your kids how much college costs, then add up the amount in their piggy bank. Search for the tuition cost of a nearby four-year college, then do the math for how many piggy banks they’d need to afford that college.

Consider a financial passport for your kids. Set up family time for creating it together, using a few sheets of craft paper, a stapler, a photo of your child or children, glitter, various stickers, and stamps and an ink pad (if available). Use four to six sheets of 8.5 x 11 paper and cut them in half. Stack the half-sheets and fold them in half. Staple the sheets together along the center crease. Have your child(ren) decorate the cover and first page with their photo, name, and age. Dedicate every page to a different lesson you’d like to teach. If your child receives an allowance, a page can be used for keeping track of that money. Other pages can be stamped or decorated with a sticker for every destination in their financial learning journey—examples: a lesson about banks and how deposits work, a lesson about arithmetic at the grocery store.

If you’re married or co-parenting, set up a time—say, the first Sunday of every month—to discuss how you want to continue teaching your kids about money.

Teaching children about money isn’t easy: it requires time, practice, and patience. You could have a powerful impact on the financial stability of not only your children but also future generations. Mercer Advisors champions its role as a guide for building generational wealth in your family. To learn more, contact a Wealth Advisor.

Are your kids teenagers? Check out Part II: Nurturing Healthy Financial Habits in Your Teenage Kids (or Grandkids) here.