From time to time, we like to focus on topics appropriate for sharing with the children in your life. We want to provide you with ways to expose them to financial concepts early, with the goal being to help them create their own financial foundations.

Credit is one of those topics that, with the right lesson plan, can be taught early. One way to do this is by establishing the Bank of Mom and Dad.

Here’s how:

Age 5 – Provide an allowance, as kids can’t manage money they don’t have. At this age, providing a small allowance is a good way to get them into the habit of saving by putting their money in a safe place. The allowance should be big enough to enable a child to buy something they want, but not so large that they can buy everything they desire.

Age 8

Have them create a “personal” credit card (try printing out an image of one and laminating it) that they can use with you for items that go beyond their allowance. Purchases may be as simple as a candy bar or an inexpensive toy. And set a borrowing limit—ideally no more than half the allowance they receive.

On “payday,” require that they pay back the balance owed. They should still have some allowance left over.

Age 12

Open a joint savings account with them (that includes an ATM card) so you can start teaching them about the correlation between using their “plastic” and the available money in their account.

Creating a credit opportunity for a child early will help spur conversations about managing money, making choices, and the concept of debt.