Financial literacy is an imperative life skill. Yet, for many of us, it is elusive, if not intimidating. Unfortunately, finance classes are not required courses in most states. As a result, young people may look to parents for information. But not all parents are comfortable discussing family finances with their children. Such reluctance can leave kids rudderless in a sea of overwhelming choices. This is where mistakes happen, creating financial burdens that can negatively impact one’s ability to achieve important life goals.

By teaching your kids proper money management, you are creating a pattern of good money habits that can provide financial stability later in life. Helping children set up long- and short-term goals is a great way to help them navigate financial responsibility with a safety net. We teach our kids how to use so many tools; money should be one of them.

Involving children in finances from a very young age helps them learn smart money habits. Preschoolers can understand basic concepts such as earning money by performing additional household chores or learning the need to wait for things they want until they can pay for them. Talk openly with your child about how to make smart choices. Parental guidance can go a long way toward solidifying a healthy relationship with finances.

As young adults gain independence, many start working and earning their own money, but they may still need assistance. If you are supporting your children, let them know the monetary cost of the experiences and material items they enjoy. You’ve probably heard the advice to pay yourself first, so show your kids the value of saving for their future. Open an investment or savings account for your child and teach them the value of putting money aside.

Creating a savings account is an excellent way to teach your child the basics of money management. Bring your child with you each time you deposit money into their account, even if you aren’t sure your child is old enough to understand what’s happening. Encourage your child to deposit a portion of allowance or birthday cash, whether it’s $1 or $100, into the account each time you go. As your little one grows up, he or she will understand that the bank is a safe place to keep money.

Buy Stocks in Your Child’s Name: A minor can’t buy stocks without consent from an adult, but you can purchase stocks on behalf of your child. Do some research before you buy stocks, or work with an investment advisor. It’s vital that you buy stocks which are projected to perform well over a long period of time rather than focusing on current trends. If you buy stocks that don’t do well, you may lose the money you’ve invested for your child.

Preparing for School: A college education increases an individual’s earning potential, but with national student debt in the trillions, the idea may seem unattainable to some families. Even for families that can well afford an expensive education, considerations such as location and the number of college-bound children in the family may affect the decision of where to send a child to school.

Tax-advantaged accounts, such as 529 savings plans, can be a way to save for education expenses. These popular plans allow individuals to save for future education-related expenses. Though there are rules for distributing the money without penalties, you can make the contributions automatic, and grow the earnings federal-tax free. Many states also offer additional benefits for 529 accounts.

Another type of 529 plan is the Prepaid Tuition Plan, which lets your child lock in school credits with qualifying schools at current prices. This can be useful if you know which school your child will attend. Potential drawbacks to prepaid tuition accounts include ongoing administration fees after initial application fees and stricter rules than savings plans when it comes to eligible expenses. Speak with your investment advisor to learn which option might benefit your situation.

When sending your child to school, discuss expenses. Many students can and do work while in school. Be clear about who will be paying for needs and wants. Taking a financial stake in their education can teach kids responsible money management and build their confidence.

It’s important to keep an open and ongoing dialogue with your children regarding financial health. As fixed costs like food and gas continue to increase, understanding the numbers behind the necessities will be vitally important to financial success. Through financial literacy, your children will be better prepared to navigate the effects of money valuation during their lifetimes.

Financial literacy has major benefits at every level, and the principles for proper money management can be taught beginning in childhood using simple concepts. Even if you are starting late, there are steps you can take to ensure your child’s financial security. Remember, there is no better time than now.