High School students

*One-third of parents are more comfortable talking with their kids about smoking, drugs and bullying than about money, according to the Council for Economic Education’s Survey of the States.

Another 75 percent of college students with credit cards admitted they were unaware credit cards had late payment penalties.

Kids aren’t prepared with basic financial literacy to thrive in the real world. It’s up to parents to go beyond telling and embracing the idea of showing. Lead by example and teach your children these crucial financial lessons before it’s too late.

Create a budget

Budgeting is the cornerstone of financial literacy, and all other financial lessons are contingent upon it. Research by Gallup shows that only one in three Americans actually make a detailed budget. If budgets intimidate you, break down the basics and start them with an allowance.

Start by giving a dollar per age or per assigned chores. Parents of older children can also give their kids an entire month’s allowance based on recreation, school lunch money and gas for them to budget on their own. Some experts encourage showing your kids how to take 10 percent out for a big ticket item and 10 percent for charity. You can also show them how to contribute 10 percent toward their college fund.

Build an emergency fund

Teach your kids that emergencies sometimes happen, but they don’t have to break the bank. Discuss how car or home repairs can sometimes sneak up on a family and leave them scrambling for cash. Get them involved with building up an emergency fund by throwing a yard sale, taking on a side gig like freelancing or consulting from time to time, and saving a small portion of your income.

Talk to your kids about ways to stay financially healthy like financial investing, getting insured or getting a home warranty that covers the costs of fixing your appliances when they go on the fritz. The more your kids understand how to financially protect themselves, the better prepared they’ll be to navigate the process on their own.

Open a banking account

Start a checking and savings account in your child’s name and teach them how to balance a checkbook. Walk them through how to connect their accounts to their college savings and using an app like Mint to keep track of their spending. Talk to them about what happens when they bounce a check and overdraft fees. You can also ask your bank or credit union about pre-paid VISA or Mastercards to load with your child’s allowance. When the money’s gone, the card stops working and your child is left wondering if their last purchase was worth it.

Teach your kids a work ethic

Instill a work ethic as soon as possible. Children as young as 3 can help put things away and help out around the house. It may take you longer to get the house clean, but kids want to feel like they’re making a contribution to the family. And remember that part of having a good work ethic is being allowed to fail. Kids learn by modeling your behavior and experiencing things for themselves — so combine both in your day-to-day approach to being a financial mentor.