One of my proudest moments as a parent was in a store shopping with my oldest child. I had given her a small amount of money to spend on whatever she pleased. As we walked around, I noticed that she and I had a similar shopping strategy. She would look at what she liked, check the price, and decide if it was worth giving up that amount of her cash. She passed up quite a few items and ended up using a small portion of her money on a wallet. I was happy that she had bought something fun, but practical, and still had money left over for a later date.

I knew in that moment that I had successfully given my child smart financial decision-making tools that she would most likely use throughout her life. It was more than just a wallet purchase; it was a symbol of a lesson that I had passed on. Here are some of the steps I took to get to that “moment.” I hope they help you set your child up for financial success!

1. Lead by example

I love to shop alone but am usually not so lucky. When I have the kids along, I like to give them a job as we walk through the store. One of my older kids will hold the coupons and another will hold the calculator. Even my younger kids like to watch and help as they sit in the front seat of the cart. Give your children jobs and let them learn from their number one teacher: you! Even if you don’t actively talk with them about what you’re buying and what’s on sale, they’ll see how you shop and follow your lead.  This is one of the first experiences with money and shopping that your child will see, so be sure to set the example wisely.

2. Set up small earnings

Based on your child’s age, you can decide what chores are appropriate and tack on a proper pay rate. For example, if my five-year-old cleans his room each week he’ll receive $5.00 at the end of the week. You can give more or less based on what you feel comfortable giving. This also works as a great form of “currency” when haggling for better behavior around the home or school.

3. Coach as you go

As your kids earn small amounts of money, you may want to have conversations with them about how they might want to spend or save it. My daughter likes to go shopping but is very critical on what she will spend her money on. It may take her three trips to the store to actually buy something. She wants to save as much as she can, so at the end of the day she’s learned the importance of deciding if a certain purchase is actually worth it. I find that when we give kids their own money to spend, they’re less likely to want that huge toy that they would normally ask you to buy for them. Remind them of how it feels when they ask you to spend your money versus when they spend their own.

Related: 7 Ways to Juggle Work, Kids and Coupons

4. Buy a piggy bank

It’s not hard to find the iconic piggy bank or another container that can hold dollars and cents. Give them the option to save for a rainy day. Sometimes when my kids have extra money from birthdays or Christmas they aren’t sure what to do with it. That’s when the savings box or piggy bank comes in handy. Encourage your kids to save their money for a special treat, a boring week, or a fun event. This will help teach them “delayed gratification.” As they get older, they’ll know how good it feels to have some money set aside.

5. Let them loose!

Now that my kids have practiced all of the tips above, I enjoy watching them decide how to spend their money. They’re more grateful for what they buy. Since they had to work for the money and save it before buying that precious item, I know they’ll cherish it even more. Enjoy watching your kids use these precious tools all the way into adulthood.

This is a guest post by Amber S. from Waynesboro, PA.

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