On this week’s show, we’re tackling personal finance when it comes to kids. Opinions vary on how, when, and if you should give kids money. What do you do?

So many things in life are best done early and often, from saving for retirement to paying down debt. The same holds true for teaching children about personal finance, discussions about money should take place earlier than later.

Beth Kobliner, author and member of the President’s Advisory Council on Financial Capability for Young Americans, says children can be taught lessons about money as early as 2 years old.

According to Kobliner, children begin learning about money at a very young age simply by being present while money is being exchanged. “You’re seeing your parents have transactions and you may not see dollars, bills, and change anymore,” Kobliner says, “but you’re seeing plastic cards being given and cash coming out in return from machines.”

From there, Kobliner says children are able to grasp concepts of value and choice. For instance, showing a child a range of things that can be purchased for a dollar can help a young child understand that each unit of money has value.

As for older children, Kobliner says that the age-old debate of giving a weekly allowance versus paying a child for doing chores may be a fruitless fight.

“Some studies show that when you give kids an allowance and you don’t tie it to chores, it’s actually worse for the kids. But you have the same number of studies that say if you give [money] for chores, kids feel alienated from the family or don’t feel part of the group,” Kobliner says.

While many parents use money as a reward for things such as good grades, Kobliner says that children may not see the inherent value of being a good student if the goal at the end of the semester is a cash payout.

Kobliner decided against a cash-for-grades system for her three children. “First of all it would be very expensive … but also it would sort of diminish some of their own accomplishments,” she says.

And as children grow from preschoolers to teenagers, there is one topic parents can always come back to: College.

Kobliner says that in early elementary school, parents can begin to talk to their kids about family goals and that one of those goals is to send their children to college. As children get into middle school, parents should start talking to their children about things like affordability.

Old habits die hard, so teaching good financial habits early can go a long way in setting up your children for financial success.

Oklahoma

A proposed Oklahoma state law will mandate high school students to take classes in personal finance. Source: Entrepreneur 

$16

Roughly the average weekly allowance kids received, or $65 per month. Source: Mint 

$41-$50

Four percent of surveyed parents gave their children $41-$50 per week in 2013, four times the amount of parents that gave that much in 2011. Source: Reuters