Teaching money management to children can be a challenge in and by itself, but add divorce and co-parenting to the mix, and it makes the job even tougher. While it can be difficult to consult with a former spouse — somebody you no longer share a life with — on every decision, the two of you should attempt to make the bigger decisions together and trust that each will work within the confines of that agreement. This is especially true when it comes to teaching children smart financial habits.

Allowance: Yes or No?
Your feelings about giving your child an allowance may differ greatly from his or her other parent. The issues you both should focus on are whether to give an allowance, when to start giving it, how often, how much to give, and how it should be spent.

If co-parents can agree, decide which of you pays the allowance and the degree of responsibility or chores your child will be required to complete. If the two of you can’t get on the same page, your child may try to take advantage of this by seeking financial support from each of you.

The Best Way to Teach Money Management: Lead by Example
Preach a good message and then practice it by making a budget and spending with cash. You cannot control what your co-parent does, but you can control what you do.

When the children are with you and you use cash or a debit card to pay for a meal at a restaurant or clothes at malls, they may ask you questions. For example, if asked why you don’t pay with a credit card like their other parent, make it an opportunity to explain your point of view. Talk about why you feel it’s better to buy most things with cash — or with a debit card. If they persist with the credit card point, you can tell them why you don’t believe in them. Try not to criticize other beliefs, but stay focused on why you do what you do.

Money Lessons Evolve Over the Years
In the early years, children ought to learn that they may have to save to buy something they want. From there, make it visual. With preschoolers, one way to teach about money is by creating three jars — each labeled “saving,” “spending,” or “sharing.” Whenever your child receives money, whether from an allowance or birthday gift, divide the money equally among the jars.

Eight- or 9-year-olds can begin to make choices about how to spend money. During the pre-teen years, consider introducing the kids to the concept of compounding interest and the idea of saving for retirement at some point. Those who face challenges of running out of money often could benefit from early lessons on budgeting.

Finally, take every opportunity to involve children in some of the family’s financial decisions. For example, at the supermarket you might explain why you make the purchases you do, e.g.: “The reason I choose the generic apple juice over the brand names you see on TV is that it costs 50 cents less and tastes pretty much the same.”

Also, talk about finding deals. Explain how buying certain products (paper towels, lunch bags, soap, etc.) in bulk can save money.

It’s never too early to start teaching children good financial habits that hopefully will last a lifetime.