Piggy bank: financial literacy building blocks for kids.

• Position: Money Talk

Financial decisions were once much simpler. Let's rewind the clock to a time when, after graduating from high school or college, individuals would begin a job at a company where they would remain for the entirety of their career. Cash inflows were simply a pay check while working, followed by a pension in the golden retirement years. Employers would fully cover the cost of health insurance, and, upon retirement, Medicare would substitute. Banking would occur at a local bank where tellers were identified by their first name, and interest was paid on cash savings. If there was excess cash in a checking account, conservative investing would take advantage of the power of compounding.

Let's now fast forward to today, where it is the responsibility of each individual to decide how much to save for retirement, where to save, how to invest, when to pay off various debts, as well as what to do about health insurance and healthcare costs. In a time when endless information can be found on the internet at the click of a button and the choices available to consumers are infinite, individuals must have a solid financial literacy base in order to make good financial decisions.

Now, more than ever, it is essential to teach financial literacy skills to our children. As a certified financial planner, I recommend teaching a series of financial literacy building blocks throughout childhood.

Talk about money

Make time for family discussions about money. It's very important to talk with children about why you do things the way that you do them in your household. As parents, practice what you preach. If you teach your children about the importance of saving, and then children see you spending all of the money entering your household, you are sending a mixed message. Children will pay attention to the action rather than the verbal message.

Young children can begin to learn about money and adopt early skills needed for a lifetime of currency use. Teach young children about different currencies. Practice counting and exchanging coins and bills with them: four quarters for a dollar bill, a five-dollar bill for five one-dollar bills. Simple games such as "store" or setting up a lemonade stand are fun ways for children to gain comfort with money.

Help kids understand prices, purchases and how to make change. Have your child open their own library card and explain the...