LifeZette has teamed up with the pros at Dave Ramsey to address your most pressing money issues and concerns. One of the most important in family finance is sharing smart money habits with our kids that will last a lifetime.

Teaching our kids financial literacy early on in their lives can be just as important as teaching them educational literacy. While we readily pick up a book every day to make sure our children read, many times we do nothing to prepare them to handle money. It’s a skill they will need for a happy and secure future.

T. Rowe Price’s 7th Annual Parents, Kids and Money Survey, released in 2015, says that kids who have financial discussions with their parents are more knowledgeable across all financial topics. They also feel smarter about money and have financial direction, too.

LifeZette spoke with financial expert Rachel Cruze about the importance of teaching children about money. She is co-author of the No. 1 New York Times best-selling book “Smart Money, Smart Kids” with her dad, Dave Ramsey.

Question: What is the best way to teach kids about money?

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Answer: In terms of a strategy, I like to say, “More is caught than taught.” This means that children are always watching you. So model good money choices for them. Model an ethic that says, “In this family, we work hard and save money.” Kids are like sponges, and this will soak through. Your bad habits will, too, however. If you go shopping to relax when you are stressed and spend money you don’t have, your kids will soak that up. If you use money as a band-aid or a cure, they will, too.

It’s also important to sit down and talk with your kids about your philosophy about money. For example, money can buy fun, but it can’t buy happiness. Money is amoral and used by humans in either a good way or a bad way. The money itself isn’t bad. You are helping your kids if they understand these deeper money facts right out of the gate, at a young age.

Question: At what age should parents begin to teach financial literacy?

Answer: At around five years old, give your kids a three-part mandate: Give, save and spend. Notice that giving is first; teach your children the power money they earn has to help others. In a kid-centric world in which everything revolves around them, shine this bright light on giving. Teach them to be other-centered, rather than self-centered. Children who learn to give early are more centered in themselves, and also grow into more grateful people.

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An envelope system is an easy and effective way to teach the three-part mandate. Take three envelopes and write “Save” on one, “Spend” on another, and “Give”on the third. Work with your children to develop a budget for each envelope from their allowance or gift money, and they will quickly see how fast money goes out, and how routine it becomes, with effort, to save money each week. And make sure they are putting some in the “Give” envelope. That’s their money that helps others.

Question: How do we teach kids that giving is empowering?

Answer: We can do this by having kids earn the money they give to others. A lemonade stand that your kids set up and operate is a great idea, with the money they raise a powerful side benefit to the fun itself. Then, let them donate that money to a cause or group that they care about.

Make giving mandatory, not optional. We brush our teeth, we do our homework, we work hard every day, and we give to others.

Question: Are chores a good way for kid to earn money?

Answer: Chores help to teach that when you work, you get paid, which is a pretty basic life lesson. I don’t believe in just handing out allowances without kids earning them. But putting a chore list on the fridge for young kids with a dollar amount next to each line item is very effective. Then, when they do a chore, they get paid a previously defined dollar amount. It’s just like real life.

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I believe that some household chores should be done by kids just because, as a family member, they help the family run. Mix these unpaid chores in with your kids’ paid chores.

Question: How do we teach teens to handle money responsibly?

Answer: At around age 15, kids should have a student checking account. What my parents did was put the money they would normally spend on me from their budget into my account, and let me learn to manage it on my own. If I ran out of money due to poor budgeting, their response was, “Oh, well!” This teaches independence with money and sharp decision-making, too.

Of course, there are always those exceptions when you help your child with a few dollars here and there. They will make mistakes along the way. That’s natural, and it’s a part of growing up. You want the mistakes with money to happen while your kids are under your roof. Try not to make too many rules with money, but use common sense. I like to say that too many rules are legalistic, but too much grace is enabling.

Question: If there was a motto for how to use money, what would it be?

Answer: Leave a legacy. Be an outrageous giver.

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