Q: When should kids start learning about money?

A: Three to 5 is not too soon to start teaching concepts like giving up something now to get something later. Another important lesson is: Money doesn’t grow on trees. Kids see parents drive to the ATM, press a few buttons and get a couple hundred dollars. They don’t associate work with money. It just magically appears.

Q: How can parents help kids develop good spending and saving habits?

A: Set up a fake store at home. Put price stickers on things and say, “Here’s what you have. Here’s what you can buy.” Use buzzwords like “save,” “earn,” “trade” and “reward” to help them make the connection between money and things.

Q: Is an allowance a good idea?

A: It’s a great idea if it’s in line with your family philosophy. But it’s harder to show the value of money if they haven’t done anything for it. Make it clear why they’re getting this money, and associate it with buying certain things. They could donate 25 cents at church. They can save for Christmas gifts. Have a piggy bank for each use.

Q: Any advice for teens?

A: Have them come talk to someone like me. Set up a custodial account in their name. It’s a great way to teach saving for the short term versus investing for the long run. By the time they’re in middle school, kids are capable of setting goals five to 20 years out.

Q: Can addressing pitfalls early avoid problems?

A: Yes. Kids need to learn financial responsibility by middle school or there’s a good chance they never will.