As parents, we want our children to be successful and happy in life, but teaching them financial independence often gets put on the back burner. Many parents wait until their children are graduating from high school or leaving for college to begin talking about money management.

Here are three tips to help your children forge a path to financial independence:

1. Talk about financial goals with your children and then help create a plan to set them up for success.

  • Define what financial independence means for you and your children. Do you want them to manage their own cash flow? Appreciate and know how to earn money? Set a budget to live within their means?
  • Talk with your children about what is important to them in life. What kind of lifestyle do they want? Do they want a family? What level of education do they want to achieve?
  • Talk to your children about how financial decisions might affect their lifestyle goals. How will they use credit? What level of debt is acceptable? How much should they be saving?

2. Utilize money management tools to gradually increase your child’s level of responsibility and independence.

  • An allowance can introduce elementary school children to the concept of managing money. If you wish, the allowance can be linked to completing basic family chores.
  • Using a monthly budget can help middle or high school children learn to live within their means while teaching them independence and accountability for their own cash flow. Help them estimate their projected monthly expenses (lunch, fun money, clothing, and so on) and then compare their actual expenses each month. Talk with your children about why they may have gone over budget and help them find ways to cut costs.
  • A checking account with a debit card is a valuable tool for teenagers to begin managing money through a bank. Your children can only spend existing funds, and they have the flexibility of online banking and debit card usage.
  • Encourage part-time jobs, such as cutting grass, shoveling snow, babysitting, or working for a business. Your children will learn to appreciate the power of earning a dollar. My parents taught me this valuable lesson during middle school when they expected me to babysit for clothing money. Their confidence in me was empowering and made me appreciate my new purchases even more.
  • Credit cards should only be introduced when your children have a proven ability to manage a debit card. My children were allowed to open a credit card account when they were sophomores in college so they could begin establishing a credit history. Our rule was (and still is) that you only charge items on your credit card if you are able to pay off the balance each month.

3. Be a role model for fiscal responsibility. Children watch to see how adults earn, save, and spend money. Make sure your example is one that sets the tone for their future success.

Deb Hornell is an author and an expert in group facilitation, leadership development, and change management. She has been helping individuals and companies grow and succeed for more than 25 years.