It’s possible that your kids received money for Christmas—for some, maybe a lot of it. If you’re struggling with how much to let your children “spend,” consider doing this:

Set up three small boxes in your child’s bedroom or buy a small three-drawered container. Label one drawer or box for saving, one for spending, and one for sharing. As children receive money, set up a system so that a certain percentage automatically goes into each section. Then, for example, a child will have a set amount of his or her own money to buy something for himself, put into a savings account, or donate to a favorite cause or charity like a local food pantry.

Daily life presents many other occasions to help children understand money and how to use it well. Children learn by playing, by imitation, and by participation. Suit activities to your child’s age, interest level, and attention span. For example:

• Give children younger than age five mixed coins to count as objects (one, two, three coins). Supervise children handling coins—they’re easily swallowed. As children grow, help them identify coins and count them as money (one nickel, one dime, two pennies—that’s 17 cents).
• In a store, occasionally give your child some chance to spend. Limit the options—that saves time and reduces conflict. Also give your child the option to save the coins at home rather than spend them in the store.
• Your young child might not be ready to understand the concept of saving money for college, but might be ready to save to buy a book or a toy. Young children need rewards to reinforce their saving habit, so at this stage tie savings to spending or short-term goals. Then, when your child achieves one goal, encourage selection of a new goal.
• When the piggy bank at home has a few dollars in it, bring your child to the credit union to open a savings account and make a deposit. The credit union welcomes children’s accounts and will reinforce your messages about smart money handling. Set up routine visits to the credit union to show how savings really add up.
• Ask your child to help make buying decisions from time to time. Say, “You decide which cereal we’ll buy this week,” and offer two or three acceptable choices. To help your child evaluate the choice, later ask, “Are you glad you picked that one? Would you choose it again?”
• Express out loud some of your own goals, options, and decisions as you shop. Say, “We won’t go to a movie this week because we’re saving for vacation.” Or, “This fruit looks old—it’s not worth spending the money on it.”