How soon is too soon to start talking to kids about money?

You can hardly start early enough according to Young Americans Bank President Richard Martinez.

When your kids are two to five years old, he says, you should start “talking about money, getting them familiar with coins and dollars, and the spending power of that.”

As they get older, introduce more advanced concepts like budgeting. An allowance is a perfect tool, Martinez says.

“Youth have to have something to be able to budget, to make decisions with. So make it meaningful,” he said. “Use your household values to determine whether they earn it or whether it’s just a privilege of being part of the family.”

He recommends getting them started with the “bucket concept,” that their money should be earmarked for different things as it comes in.

“We always like save, spend, share,” he said. “So they’re saving first, spending a portion, and then also giving it to a cause that is important to them or to their family.”

Kids can handle fairly advanced concepts surprisingly early, Martinez said.

He recommends getting a “learning credit card” between the ages of 10 to 12.

He says under a parent’s protection, they can learn how and when to use a card, and how long even a small balance can take to pay off without serious consequences.

Those types of practical lessons he says are key to establishing good money habits that will last your kids a lifetime.