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Are you talking to your children about money? Whether you have a preschooler or a high school student, experts say it’s never too early to start teaching financial literacy.

Yet many parents are uncomfortable with the topic or don’t feel like they have the skills to talk to their children about money management, says Darlene Goins, Strategic Planning Manager at Wells Fargo. A Versta Research survey on behalf of Wells Fargo Private Bank found only 6% of children whose parents are wealthy reported their families regularly met to discuss finances. But among the children surveyed who did not have regular meetings about money, more than half felt they would be valuable.

“Money shouldn’t be a taboo subject,” says Goins. That’s part of the reason Wells Fargo created Hands on Banking®, a noncommercial, free financial education program offered as a public service of Wells Fargo. It’s available in English and Spanish, and presents the basics of smart money management in a fun and interactive format. Hands on Banking offers resources, tools, modules, and other educational content on topics including budgeting, saving, banking, debt, credit, investing, as well as content designed for specific audiences including youth, adults, servicemembers, seniors, and entrepreneurs.

“You want to start teaching your children at a young age that money is a limited resource and how to handle it, so that when they do enter adulthood, they will already have good habits in place.”

Goins recommends the following simple lessons, starting from an early age and continuing through college, to help give your children a financial foundation to last a lifetime:

1. What money is and where it comes from.

Your child will realize at an early age that money is used to buy things. Make sure he or she also knows that it doesn’t just come out of a magic machine (the ATM), but that you or your spouse had to work for it, Goins says. Additionally, explain the role of banks and help your children learn the names and values of the money denominations. And if your kids often see you pull out your credit card to pay for purchases, make sure they also see you pay the bill at the end of the month.

2. How to set financial goals and save for them.

Goins recommends giving school-age children an allowance so they can get used to making choices about their spending. Help them set a goal to buy something they really want, and show them how they can eventually obtain it by saving. Then, if they decide to use their savings on an impulse purchase, don’t stop them.

“You want to give them a chance to make money mistakes now, while they’re young,” Goins says. “They’ll learn that if they keep buying candy bars in the checkout line, they won’t have enough for the electronic device they want so badly.” Younger children can keep their savings in a piggy bank, but once your child has saved a substantial amount, explain that banks are a better place to keep their money safe, and help him or her open a savings account.

3. What the basics of budgeting include.

Teach your child that money is a limited resource, and talk about the difference between wants (a video game, a candy bar) and needs (food, shelter).

To reinforce that message, discuss your own spending decisions. “You don’t have to share the specifics of how much you make, but you should share the big picture of your household finances,” Goins says. “Talk about the expenses you’re responsible for and make sure they know you are putting money aside for emergencies, for retirement, and for college. Talk about the choices you’re making by saying things such as, ‘We can’t buy that right now because we’re saving for you to go to camp next summer.’ ”

4. How to be a smart consumer.

Part of being financially educated is making smart spending decisions, and that means comparing prices. “One of the easiest ways to start teaching price comparison is to show your kids the gasoline prices as you’re driving down the road,” Goins says. “Ask them, ‘Where do you think I should buy gas today?’ ” Once your children are more sophisticated, you can talk about how price is just one piece of the decision-making process. Show them how to read reviews and compare products, and discuss how you might be willing to pay more for special features or reliability.

5. What debt is and how to manage it.

With so many Americans carrying credit card balances, it’s important to teach your child about loans, interest, and debt. If your child badly wants something that they can’t afford, tell them they can borrow money from you, but that there will be a price. “You can say, ‘I’ll lend you the $5, but when you pay me back, you owe me $6,’ ” Goins says. “Teach children that if they want something immediately and choose to borrow for it, they have to pay a price for that convenience, and it’s called interest.”

Wells Fargo Advisors is a trade name used by Wells Fargo Clearing Services, LLC and Wells Fargo Advisors Financial Network, LLC, Members SIPC, separate registered broker-dealers and non-bank affiliates of Wells Fargo & Company.

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