Money rules everything. That’s one of the first lessons parents have to teach their children growing up - the necessity of acquiring, spending and saving money to live your life. But how do you teach your kids the importance of wise financial spending when they’re still too young to handle bills and a job? You certainly don’t want to wait until your child is in financial control of their own lives before you begin imparting advice, but an allowance and a piggy bank don’t really go far enough in teaching kids the best way to handle their finances.

It’s important to stress the importance of delayed gratification when it comes to teaching your kids about spending. Children don’t have a firm grasp of the future, or what they would need money for in the future. Without a job and bills to demonstrate the purpose of money, they’re more likely to believe, at least unconsciously, that money is a renewable resource that will appear when they need it. Teaching your kids early on about why saving money is important can prevent financial struggles in their adult life.

Plan goals for savings

Kids often struggle with the concept that something should be delayed or put off in order to maximize the potential benefits. Adults understand the idea of savings accounts with high-yield interest rates, stock accounts that accumulate wealth over a long period of time and investments that generate profit. Kids understand that if you hand dollar bills to someone, they’ll let you walk out with a thing you want.

Parents can go over the concept of larger savings for more expensive goals by sitting down with their children, writing out a set goal and budget, and discussing how to make that happen for a child.

For example, if you regularly give your child a $5 weekly allowance but she typically spends it on small trinkets or snacks, she’ll have lots of small trinkets and snacks but not anything nicer. Talk to your child about something they may want - a video game or a particular toy - and discuss how much it costs. Write out a weekly budget to calculate how much she would have to save to buy the item as soon as possible, or eventually. For example, if she wants a $20 game set, she could save all her money for a month and acquire it. And if she’s willing to wait a little longer, she could put aside a little less money and acquire it in a few more weeks.

This particular lesson is one of the most challenging for parents to impart on kids - children don’t have a long attention span or concept of hard money lenders, and often they’ll lose interest in a toy over a period that long, or change their mind as soon as a slightly better trinket comes along. But if you can impart the importance of sticking to a long-term goal, your child will have a much easier time learning the benefits of saving and planning for the future.

Offer some economic freedom

Kids learn from their own mistakes. Although as parents we instinctively desire to rush in and give everything to our kids, sometimes they’ll learn better by messing up than by being protected. The same is true for money - if you allow them to learn the consequences of misspending early on in life, they may grow to appreciate the importance of saving more when they get older.

If you’re not already giving your kids a small allowance and can afford it, allowing your kids a little bit of financial freedom can enable them to practice making responsible choices in their day-to-day life. One way to teach them about responsible spending, for example, would be to decide that outside of holidays, you won’t get them gifts or toys - instead, they should save up for such gifts with an allowance that you give them on a regular basis (or make them earn through chores).

The result is they have more financial control over something that interests them - toys - and which they won’t suffer for if they spend poorly. If they spend all their money instead of save it, it means they got small trinkets or snacks instead of something larger, and if they save it, they can reach a goal and learn about the benefits of spending money wisely. Teaching your kids about money is crucial, because the lessons they learn will define their ability to navigate through life as an adult. Introducing them to finances in a low-stakes way can instill the right habits without the negative potential consequences.