7 on your Side: How to teach your kids about money

JERSEY CITY, New Jersey (WABC) -- April is Financial Literacy Month, so what better time to teach your kids about money?

Research shows financial habits are formed by the time a child is seven years old. but it's never too early or too late for lessons to help them succeed. While many parents make sure their kids developing brains are exposed to music, art and reading, most don't talk to their kids about money.

Luna de la Portilla's parents are starting young - she's only four, but they encourage her to collect spare change and identify the coin's different values.

"Right now when she finds money on the ground, in the couch, she gets to put it in her piggy bank, and that's a routine we do and it makes her happy," says Angela Sharp, Luna's mother.

Make budget choices

The family also involve Luna in making budget choices beginning at the grocery store. "We'll look at the cereal or whatever and say which ones healther, which ones cheaper and more expensive." Says Luna's father Manuel de la Portilla.

Talk to your kids about wants versus needs. At the store if you need toilet paper, but want ice cream make a choice, do you have money for both?

Use Money, Cash Money

Its also important to handle actual money.

"To a large extent in the world of Apple Pay, and plastic being so readily available, sometimes it can be very helpful to use cash around your child," says Allison Kade, who is a millennial money expert with www.meetfabric.com which aims to bringing financial products like life insurance to new parents into with an experience that is simple and affordable.

Open a Savings Account

Allison advises parents to open a savings account and to think of investing for a young child as putting money aside and watching it grow. She says talk to them about earning interest in broad

Teach Credit and Debt

Alison also tells parent to teach kids about how credit cards and loans work. Tell them you can get what you want by taking on debt but there's a flip side to borrowing or racking up debt.

Reward Savings

Also remember to reward your child if they save, they get to buy!

Allow Mistakes

If your child blows all their birthday money on a silly toy that breaks right away, make that a teachable moment. Don't replace the item, kids learn from mistakes.

Delay Gratification

A Stanford University study showed the better a child was at waiting for a stronger payout later they would be more successful as adults.

Sharing is Caring

Teach your child about charity and sharing their money. Kids instinctively love to help others, help them make donations to causes they care about and they will learn to make the world a better place and that "money isn't everything"

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