Smart money lessons for kids that can last a lifetime

Dreading the idea of having a conversation with your child about money? It's common for many parents -- T.Rowe Price found 69 percent of those surveyed have at least some level of reluctance to talk with their kids about finances. And parents who have a lot of credit card debt or who've gone through bankruptcy were more likely to say it made them feel extremely uncomfortable.

Taking stock

Even if you've made money mistakes in the past or aren't sure if your own financial habits are top notch, having regular conversations with a child about money can help set her up for a stronger financial future.

"A few things we found in the surveys over the years is that money conversations should be frequent, and they don't have to be earth shattering. It can be comparing prices in a store or calculating a tip at a restaurant. Those are all good ways to involve your kids in the conversations about money," Roger Young, CFP at T.Rowe Price said in an interview with CBS MoneyWatch. "We've definitely found that even when parents have some negatives in their past, if they talk about it, the kids have better outcomes"

Start early

Many experts suggest talking with kids about money as early as kindergarten, making sure to keep the conversations age-specific. For a younger child, introduce the concept of money, maybe with a piggy bank or explaining the value of bills and coins. Make a plan for subjects you would like to tackle. Unsure of what's age-appropriate? Checking jumpstart.org's list of national standards for children's financial literacy can help you make a plan. 

Jennifer Harper, director at Common Sense Financial Literacy, suggests starting with tools like spend/save/give jars -- a Pinterest sensation -- to help very young children learn about the different roles of money. "Money can have different jobs, money can do different things depending on what you tell it to do. These allow the child to have control of what they want. Instead of having a last-minute impulse buy, you can say, "do you want this bad enough to take money out of the spend jar?'"

One way to start the conversation is to open the floor so your children can ask you questions about money. That way it doesn't feel like a lecture.

"It's sharing the good and the bad. Say 'because we saved, we are able to go on this vacation.' Or 'because we planned, we can buy you this for Christmas, and we are excited about it,'" Harper said.

Leveling up money talks

For older children, look for teachable moments. If you're at a grocery store, take a few minutes to explain your shopping list and budget, or why you're buying something on sale this week but may not next week as a way to show how to live within your means.

Shopping for the holidays? A gift card can be a great way to help kids learn about making smart spending decisions because it has a limited amount that can be spent. Have your child make a list of things to buy with the card. If coupons are available, help them do the math to figure out how much they can save.  

The digital age means many transactions, like depositing checks or paying credit card bills, are done online, or mobile payment systems and debit cards are used to pay at stores instead of cash. Discuss how you pay your credit card bill or explain the process of depositing a check into your bank account.

"Spend a little time figuring out what's age appropriate. ... If you're looking at your accounts online, show your child this is what we bought, this is where the charge came in. So they can look at something, and it's part of life," Ted Beck, CEO at National Endowment for Financial Education, told CBS MoneyWatch. "You can even give homework assignments: Why don't you look up how a credit card works? How a bank works?"

Chores are another way kids can begin to learn life skills and manage their own money. As they move toward high school and after-school or summer jobs outside the house, help them open a savings account and set a weekly budget. 

Preparing to leave the nest

For many families, paying for college out of pocket isn't an option. It's best to start having conversations with your child about higher education and expectations for tuition early on in high school.

Will you pay for tuition if they stay in state but can't cover the amount if they go to a private out-of-state school? Are there scholarships or Pell grants they may be able to apply for?

Also important is talking about their career goals and being realistic about salary expectations when they graduate.  

"You probably will make great money through your career, but maybe not out of the gate," Harper said, "Look at what the student loan payment means on your entry-level salary."

If they decide to take on loans and don't understand how much their monthly payments will be when they graduate, adult children may end up right back where they started -- at home.