Around junior high, I dreaded coming home after school, but not for the reason you might assume. When I started seventh grade, my parents helped me open a checking account to go along with my savings account. The goal was to teach me how to manage the money I earned from working on our family farm. Instead of going to the bank every time I needed cash for a school project or to buy a friend a birthday gift, I could write a check. (Yes, I’m that old).

But I struggled to keep my accounts balanced. Chalk it up to inexperience (and probably teenage laziness), but I overdrew my checking account a lot. I had the funds. I just didn’t bother to track and transfer more money when needed. Back to my dreading coming home after school…The bank would send a notice every time there was an overdraft on my account, and you can imagine my parents’ reaction to getting the mail and seeing yet another notice from the bank. (They helpfully stamped the outside of the envelope with “overdraft” — no hiding it from the parents!)

For my parents, the easiest thing they could have done would have been to take away my checkbook or close the account. Or they could have taken over management of the entire process. And I would have learned nothing. Instead, they sat down with me and my bank statements and helped me work through a rudimentary budget and the fine art of reconciling an account.

The reality is that kids — even smart ones — won’t know exactly how to manage their money from the beginning. (No, you can’t buy all the toys in the store.) Like many things, adults may tend to assume the how-to part of making smart money decisions is obvious:

  • Spend less than what you make
  • Keep good records
  • Create a budget

The next time you think your kids are being “dumb” about money, like when they keep buying stupid whose-its and whats-its in an app, hit the pause button. Did they really make a dumb decision or did they make the best (or only) decision they could with what they knew at the moment?

We’re shortchanging our kids’ financial education if we just assume they know both the how-to and the why of smart money decisions. Don’t be afraid to start small, like helping kids understand the cost of a candy bar, and work up to the bigger things, like the cost of attending a summer sports camp or taking a family vacation. Making the time to teach the following fundamentals will increase your kids’ long-term financial literacy:

  • Don’t be afraid to talk about money. Remember the saying, “We don’t talk about religion, sex or politics?” Money tends to get lumped in with this group as well, and it’s shouldn’t. Money plays some role in just about every part of our lives. So, as part of helping your kids become responsible adults, pull back the curtain and show them how money affects the different areas of their lives and even the plans they make for the future.
  • Help your kids understand your family’s balance between what goes in/out. You may be a family that talks about money, including things like your budget (that’s a good thing). But do your kids really understand why you can or can’t do something financially? Make it point to help your kids understand the difference between financial needs (like food in the cupboards) and wants (like the latest iPhone), and how to balance the two in a simple budget.
  • Know the score. Credit card companies are sending out offers earlier and earlier. Helping your kids get a handle on the concept of a credit score can ensure they avoid making costly mistakes later. Credit scores can affect everything from whether you can get a loan to if you get a job offer. Each credit reporting agency — Experian, Equifax, and TransUnion — all offer one free credit report per year. (But don’t get sucked into “free” reporting sites. Go to the source and use the U.S. government’s portal to access those reports and learn more.)
  • The numbers need to add up. I’m sure someday I’ll give in and turn my phone into a financial magic wand, but for now, I’m sticking with cards. Regardless of how we pay for things, we need to teach our kids how to track their spending. Do they know how to access account balances and track transfers? Do they know how to balance a proverbial checkbook? The story that started this article was based on the simple fact that I was struggling to do something (add and subtract) I’d learned to do in the first grade.

Today, I never overdraw my account, and pretty much everything I learned about money came from my parents’ example and their willingness to teach me how to make smarter decisions. Granted, my teenage angst wouldn’t let me show them my appreciation then, other than a few begrudging grunts. But I tell them now that my hard-earned financial savvy will ensure they end up in the nicest nursing home in town.

What financial lesson do you remember most from your parents? What do you wish they’d taught you?