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Photo: cassinga/Getty Images/iStockphoto, License: N/A, Created: 2015:02:01 17:43:52

Children sitting on the floor and holding their piggy bank

As savvy as kids are in this Digital Age, they remain dangerously uneducated about money. As a parent, you have many important things to teach them. First and foremost should be the importance of raising money confident kids and not dependent adults. How kids handle their monetary holiday gifts and piggy bank savings is a great way to get started.

What’s the right age to start?

According to moneycrashers.com, the right age to introduce financial literacy is around age 5, but don’t go overboard. Childhood shouldn’t be inside counting coins, childhood is about playing dress up, getting dirty in the backyard and playing with friends. Let kids be kids, but that doesn’t mean that you should be setting a bad example and biting more than you can chew with your own finances. Here are a few ways to guide them to become financially “literate.”

Come up with an agreement before the holidays or special occasions, like a split or a third. Whatever you feel comfortable with in your house, but allow kids to keep some of their money to become financially responsible for spending. The most important thing at the beginning is to make saving fun.

Using envelopes or money jars are terrific ways to introduce savings concepts to kids by separating their money into groups.

Money to save, money to spend and money to give. It’s a good idea to talk about some savings goals as well, both short-term and long-term, which can also be an envelope or jar. A short-term jar might have a picture of a specific toy, while the long-term jar might have a picture of a trip or of a college. Teach your child to set aside money for short-term and long-term goals, and have another jar or envelope for spending on everyday items. It’s hard to financially keep up with 21st century kids, so if there is something that they want it’s OK to let them foot the bill.

Open up a kid-friendly savings account.

Fidelity Bank offers a unique opportunity for children to learn smart money management through the Green Team Savings, a kids-only banking program. This family-friendly program is designed to be a fun way to help children learn the importance of saving and spending wisely. One of the benefits to the program is that Fidelity Bank will make an additional deposit of up to $10 into your child’s account each year.

Teaching your children how to save is an important step to prepare them for financial responsibility and a secure future. But it won’t go very far if you don’t “practice what you preach.” Most kids don’t know the difference between debit and credit cards. For example, my children think that any time we need money, that we can just visit the ATM machine. It’s important to explain how the money gets in the ATM machine and the same thing goes for using credit cards. The use of plastic all the time could send mixed signals, so it’s important not to ignore the questions they may have about money. In other words, you are constantly modeling money habits, which they will catch more than you think.

Ultimately, saving is a good thing and positive financial habits early on in life help mold our future habits. The new year brings a perfect opportunity to teach kids the skills to be equipped to make smart money choices, especially with their newfound fortune. Because it’s never too early to teach the value of money and the importance of saving.