During back-to-school season, parents are focused on helping their children succeed academically, socially and, yes, financially. I know talking about money is not easy, and not enough schools incorporate personal finance concepts into the curriculum. That puts the onus on parents and grandparents, who may not feel comfortable with their own financial acumen. One father told me that he would rather "do the whole birds and the bees and safe sex talk" than discuss the topic that makes him feel most insecure — finances.
Unfortunately, waiting will not improve the situation. There is evidence that money habits start to form by age 7, so if you are not on top of the subject, your bad habits may be passed to the next generation. When I was conducting research for my book "The Dumb Things Smart People Do With Their Money," I learned that how you behave around money with your kids matters.
There are parents who emphasize financial matters too much in their parenting, saddling their kids with their own money issues. There are others who spoil their kids and fail to set reasonable limits around money. And then there are the parents who pressure their kids to succeed financially. As I noted: "Money is a loaded topic, and when it's handled poorly, the effects can ricochet in subtle ways down the generations, leading to chronically poor decision-making, not to mention damaged relationships and emotional turmoil."
Parents need to strike a balance: You want to instruct your kids about money so that they understand how it works and can take responsibility, but you don't want to do it so much or so intensely that your kids treat money in unbalanced ways. The Money As You Grow website (consumerfinance.gov/consumer-tools/money-as-you-grow/), which was developed during the Obama administration, is now part of the Consumer Financial Protection Bureau, and it is a great resource for parents and caregivers. The site breaks down what kind of conversations you should be having with your kids at various ages.
You can start with basic topics, then move to earning money, either through an allowance or by doing jobs for the family or others; establishing the habit of saving, which will include an explanation of interest and maybe an introduction to investing; a discussion about spending; and the basics of borrowing, which will include the benefits and dangers of credit cards.
For those who are focused on college planning, start having the conversation about the family's ability to contribute as early as freshman year of high school. Far too many wait until senior year, which is a mistake, according to best-selling author and financial journalist Beth Kobliner.
"Talking with your kid about college when he's a freshman in high school — or even at the end of eighth grade — may seem premature. All that stuff will work itself out in a couple years, right? Think again. The financial aid and college admissions process will be stressful no matter what, but waiting will only make it worse."
Kobliner has created a valuable resource, We Need to Talk College (bethkobliner.com/tag/we-need-to-talk-college/), which will help you start the conversation and provide tools and resources to navigate the college-planning process. Remember: While a college education is important, not all degrees are created equal, and parents need to concentrate on their own financial foundations, such as funding retirement, before plunging headfirst into the college-savings process.
Finally, you may not have every answer to your kids' financial questions. If they are old enough, work with them to explore challenging experiences or complex tasks. If you need help, seek guidance from a professional who can steer you in the right direction.
Jill Schlesinger, CFP, is a CBS News business analyst. She welcomes comments and questions at firstname.lastname@example.org.