It is never too early to start raising financially responsible kids by teaching them about how money works, to better prepare them for adulthood.

Eric Palmer, a financial educator with Outlook Advisors, recommends and gives tips that will help parents start incorporating their child in the life of finances as early as they can.

Tip 1: Work equals pay

“I grew up with this saying, ‘money doesn’t grow on trees.’ And with that in mind, it is important to show your kids, or students especially, the value of having a job and working,” Palmer says.

He says parents should start allowing children to work around the house for an allowance to show them that when they work, they will receive money for their efforts.

“So, really early on, as young as you can start with your children, instilling a strong work ethic is going to be key,” Palmer says.

Tip 2: Spend less than you earn

Learning that you have to spend less than you earn can help kids learn to live comfortably when they are on their own.

Palmer says that once children start becoming financially independent, they will need to start grasping how net spendable income works, which is, the amount of money in your paycheck that ends up in your bank account. Kids need to know not to spend more than that, and not to live beyond their means.

Tip 3: Setting financial goals

“All too often the financial goals, especially of children or young adults are very, very short term. They want to get a cup of coffee today or want to go to the movies this weekend. But allowing them to fix a bigger goal, helps them actually prevent spending money frivolously,” Palmer says.

So, parents can help their child by setting goals to purchase a car, pay college tuition or just save money for a couple of months to buy something with a bit more value. According to Palmer, this will help kids later on when they are trying to save money to buy a house or complete a remodel of their backyard or kitchen.

Tip 4: Budgeting

A way to teach children about budgeting is using a budgeting app or a spreadsheet to show them all of their expenses on one screen.

“Actually sit down and put all the expenses and finances in one place; that way it’s not just setting goals, it’s watching yourself achieve them, as well as making sure that you create the habit of paying bills on time, paying attention to when money comes in and when the money is due,” Palmer says.

Tip 5: Taxes

“Whether or not you’re in a high tax bracket or low tax bracket, it’s important for the children to know what taxes are and how to practice efficient tax calculations,” Palmer says.

A good way to start exposing children to taxes is by showing them that they will actually net less than they earn. The amount of pay and hours they work do not directly reflect what they actually will be paid.

According to Palmer, if children or young adults understand taxes, they will be able to comprehend and calculate how taxes would affect them in the future when they go to buy much bigger things like a car and a house.

Not only do children have the opportunity to learn these skills at home, but some high schools are offering classes that teach kids business, finance and other financially sound principles, he says.

But again, it really all starts at home. Palmer mentions that a lot of times parents tend to question: When is it a good age to start exposing children to these concepts?

“Don’t hesitate,” he says. “Start introducing your kids to that process now and making them a part of your financial plan. Not necessarily showing them all your numbers, but let them know how to plan, or how to balance the books and how much money you spend on your groceries on a weekly basis. These are really important lessons to start early on.”