The first months of the school year are full of new lessons and experiences for children. While subjects like history, science and math aim to prepare kids for college and careers, there’s one vitally important educational goal that falls to parents to fulfill – financial education.

Parents are kids’ number one resource for learning about money. Fifty-one percent of Generation Z children report they were taught financial lessons from their parents, according to a recent survey by TD Ameritrade Holding Corporation (NYSE: AMTD). Only 10 percent said they learned financial lessons from a teacher or school course, and only 7 percent gained their information from websites and blogs.

“According to the survey, the average age when children begin learning the importance of savings is 15,” says Lule Demmissie, managing director of retirement for TD Ameritrade. “But there’s no need to wait. Even younger children can benefit from early conversations about credit cards, retirement planning, saving and investing. Our research shows that children whose parents talk to them about financial responsibility at an early age are more likely to see saving as important, and develop good budgeting habits as adults.”

The TD Ameritrade survey found children need a little extra guidance when it comes to managing credit card debt, saving for retirement and understanding the best ways to invest:

* Older members of Gen Z are accruing credit card debt, with just 43 percent of Gen Z respondents saying they pay off their credit card bills every month, down from 59 percent in last year’s Gen Z survey.

* Most kids anticipate their adult financial priorities will be finding a job, buying a car, paying off student debt, getting married, buying a home and saving for retirement – in that order.

* Just 17 percent say the best way to plan for retirement is investing in the stock market, while 47 percent believe that a savings account is the best way to prepare for retirement.

“Back-to-school time present parents with the perfect opportunity to begin sharing financial lessons with their children,” Demmissie says.

Here are some ideas for parents who are looking to help their children establish good money-management skills now and in the future:

Establish good savings habits early

Explain to children the importance of savings, and how saving money can help protect them when they experience things like job loss or unexpected car repairs. Help them understand how to balance expenses and income, and the difference between a “need” and a “want.” This can help them understand what they can realistically afford. As part of this lesson, it’s important to teach them how to create and follow a budget, so they can avoid getting into debt. Don’t forget technology can also be a valuable tool to help teach those lessons. There are several budgeting and financial apps available that are geared towards kids.

Model the behaviors you want them to learn

Show children how your own family budget shapes up every month – a portion for savings, for investing, for gas, household expenses, etc. When your child asks for spending money, rather than just handing it over, establish a lending arrangement. Agree on repayment terms, including interest, and help your child understand how to make payments and how long it will take to repay. This experience of showing rather than telling can work well when educating kids about money concepts that may be a bit more difficult to grasp like managing debt or budgeting. 

Discuss balance

Trade-offs and sacrifices are essential elements of money management. You can help kids grasp these concepts through application. For example, if your daughter wants to buy a $500 tablet but has only $200 saved, help her examine how she can make up the shortfall. Will she work for the money? How long will she need to work in order to get $300? What other purchases or expenses (like a weekly movie) will she need to give up in order to save the money and reach her goal?

Share your experiences

Everyone makes mistakes – such as racking up too much credit card debt in college or waiting until your 30s to begin saving or investing for retirement. Hopefully you’ve learned from your mistakes and can share the benefit of that knowledge with your children early. Be honest with your kids about the financial mistakes you’ve made, what you learned from them and how they can avoid making similar mistakes.

“The more parents can teach their children about money and help them understand things like establishing a monthly budget or the importance of good credit, the more kids will be able use those lessons when making solo financial decisions in the future,” Demmissie says.

For more tips on how to talk to kids about money, visit TD Ameritrade’s Education Center at www.tdameritrade.com/education.page.

Provided by: TD Ameritrade Holding Corporation, brokerage services provided by TD Ameritrade, Inc. member FINRA/SIPC