“Money doesn’t grow on trees.” You’ve probably found yourself saying that to your kids. But an old saying isn’t enough to give them a meaningful financial education. As a parent, you can help kids understand where money does come from—what it’s worth and how they can spend it and save it wisely.

EARNING

The quickest way to teach kids that money has value is to let them earn it. They’ll quickly grasp the concept that their effort is directly related to the coins or bills they receive. Setting up a summer lemonade stand is the perfect way to start. They have to prepare the lemonade and keep it icy cold, gather up supplies they will need to “market” the beverage, find a great location, learn how to make change (any way we get to sneak in some math learning is a good thing), sell it and then count and divvy up the cash. There is a lot of satisfaction to be gained from seeing a “retail” project through from beginning to end. Psst…If you want to teach them the real rules of the business world, they’ll need to pay you back for the ingredients used. That can lead to a discussion of gross sales vs. net profit. If just having the fun of a lemonade stand is all you’re looking for, you can absorb the cost.

ALLOWANCE

There is much debate about whether allowance should be given for chores completed. Those who say “no” argue that allowance is strictly to teach money management. Chores are what you do to keep your home running smoothly, because you are part of a family, not a business. Take Mom and Dad, for example: no one pays them to make dinner or do laundry. The flip side of the debate is that when we grow up and get jobs, we do get paid: Allowance for chores is just the first introduction to that concept. There is no right or wrong way to go: It is a personal, family decision.

SAVING

Money often burns a hole in kids’ pockets. When your child expresses a desire for something that can’t be purchased with one week’s allowance, you have your opportunity to teach saving strategies. Help your child figure out how many weeks he’ll need to save for the item if he sets aside his whole allowance versus half his allowance. Set up a separate piggy bank for the savings, and mark a calendar to show how many weeks until he has put enough money into the bank. (If you’re worried that the item won’t be available for long, you might want to buy it yourself and hold onto it until your child has enough money. For older kids, this can introduce the concept of buying on credit.)

SPENDING

When your child is planning to buy something, encourage a little research first. Visit a few stores if that’s possible, make some phone calls or, like most shoppers these days, go online to comparison-shop. Ad circulars in your local newspaper are another resource. Make sure your children understand the concept of price per unit. If they collect shaped rubber bands, for instance, you’ll need to help them do some division to compare a pack of eight with a pack of 12.

GIVING

Just as you teach your kids to share toys, it’s important to teach them to share their resources. Many parents encourage kids to divvy their allowance into three piggy banks: It’s fun to mark them “Save,” “Spend” and “Share.” Encourage your kids to choose a charity or nonprofit that means something special to them. A young dog lover might like to send money to the local animal shelter. A budding painter or musician might choose a local arts foundation. Help your child explore the options and determine an amount to set aside, but don’t lay on the guilt. You want your kids to feel good about giving.

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