With school out for the summer, there’s no better time to teach children about money and finances, experts say.

“By teaching children the importance of opportunity costs at a young age, we can better prepare them to become confident and successful members of our community once they enter the real world,” says Jim Lundy, CEO of Alliance Bank of Arizona.

No matter a child’s age, it’s never too early to prepare him or her for a successful future by building financial literacy skills today. Teachable money moments can happen with kids as young as 3 years old and the sooner parents begin to influence positive financial behaviors, the better the chance kids have to succeed in managing money.

“Kids learn a lot by watching what you do,” says Kelly Kaminskas, senior vice president at FirstBank. “I think a lot of parents make the mistake of sheltering kids from money conversations. It’s important to take them to the bank with you, show them how you save for long-term goals, or explain the difference between funding needs versus wants.  These learning opportunities can be extremely valuable as they get older.”

“With almost everything else, we teach our children by talking as we go about our day,” says Christina Burroughs, managing partner at Miller Russell Associates, “but or some reason, that’s not the case with money or financial issues.”

Burroughs says many people grew up in families where it was taboo to talk about money, others worry that children who know that come from well-off families will lose their motivation, while some parents are reticent talk about finances because they don’t want to burden their children with adult concerns.

“But there is a nice middle ground where parents can talk about concepts without burdening children,” Burroughs says. “It’s really helpful for families to talk about the idea behind economy — that people make things or provide services that other people want or need. Then, expand on the idea that when people buy things, it becomes economy and everyone has opportunity to grow and get better because of that. Parents will be thrilled to see how quickly kids become excited by these ideas.”

Burroughs says it’s safe for parents to start talking to children as early as 3 or 4, as long as the conversation is age appropriate.

“The best thing parents can do is simply talk to their kids about the importance of budgeting, saving, and managing credit,” says Joe Bleyle, senior vice president and director of commercial real estate for Enterprise Bank & Trust. “Specifically, kids can participate in developing the family’s budget and open a savings account with encouragement to save for larger purchases.”

With high-school age kids, experts say the conversations can expand into how to get a job, how to dress to impress in the professional world, how to build a business network and the basic principles of business and entrepreneurial thinking.

“The lessons children learn while they are young will shape how financially successful they will be as adults,” says Michael Lefever, senior vice president and business banking area manager for Wells Fargo. “Just as regular exercise and a good diet are essential for physical fitness, knowing the basics of saving, budgeting and planning are essential for financial fitness.”

In order to prepare children for financial success, Deborah Bateman, vice chairman of National Bank of Arizona, says it’s imperative to show them that money is just paper without a purpose or a goal.

“As parents, the most important lesson we can teach our kids is the value of money, and we can teach that lesson and help our kids create a healthy relationship with money by teaching them to give money ‘purpose,’” Bateman says. “We teach our kids to give money purpose  by teaching them to set goals. As soon as a child can articulate their goals, we should help them to monetize those goals. It is the purpose we give our money that makes it valuable and guides our kids to make confident money decisions.”

Summer school lessons for finances

Here are five money lessons that parents can teach their children at home this summer, according to financial experts at Alliance Bank of Arizona:

How to build a balanced budget: Vacation planning is the perfect time to teach kids about budgeting. Questions like, “Where will we go?”, “What will we do?” and “How much will we spend?” can guide children through the decision-making and conscious-spending process. First, start allocating funds to basics like hotel, food and gasoline. Then, discuss that fun activities and souvenirs can only be purchased if you budget the right amount of money.

How to make important buying decisions (wants vs. needs): Review your household budget or a sample budget with your kids. Help them understand what a balanced budget is and that the goal is to save more money than you spend. Explain that there are items we need like shelter and food. But, there are also things that we want, like new shoes, a cell phone and toys, which can wait until we have saved enough to purchase them.

The importance of interest: Say you’re in a store and your child points to a toy and says, “Can you buy that for me?” Instead of handing over the toy, offer to loan your child a small amount of money, provided that they pay you back the same amount within 30 days. Remind them often that if they can’t pay on time, you’ll add more money to what they owe until they pay the money back. One day past the deadline, add to the amount and explain why they owe more.

The correlation between learning and earning: Set up a sample budget based on what your kids want. Then, determine the average monthly income of a high school graduate, someone with post-secondary training, someone with a Bachelor’s degree, and someone with a Master’s degree. This shows how much money they need to earn to have the things they want and how that correlates with their level of education.

The importance of being a contributing member of their community: Chores that are tied to earning money are a great way to help kids learn about their role in a family unit and gives them a glimpse at what is required of community members. An effective tool is myjobchart.com which helps parents set up and track chores for their children, along with prompting discussions about saving, giving and spending.