I could talk with my girls about friendships, academics, relationships, sex, drugs, and rock-n-roll (you should have heard some of our dinner conversations). But like many people, I felt incompetent about finances and bound by a culture of financial privacy.

Sound familiar?

It wasn’t until I eventually faced my own money demons and began learning how to manage my finances – and to my great surprise, loved everything about personal finance – that I initiated those conversations. My daughters were actually interested, because money impacts their lives.

Try it – your kid just might listen.

5 important financial principles I was determined to instill in my kids

1. The golden rule of personal finance: spend less than you earn

It’s that simple – and that difficult. And it’s the ONLY way to get ahead financially.

Prepare your kids to resist the messages to buy, buy, buy that bombard them multiple times a day. Of course we want our kids to enjoy life, but the choices they will have to make at every stage are hard.

Start early to have these conversations and model the actions. Ask questions without judgment. Why do they want a fancy car? What will that car do for them? What about a designer wardrobe? Is there a more creative way to dress well for less?

If you currently spend above your income, share what you’re doing to reign in expenses.

2. Align spending with values

Have you had conversations with your kids about what matters most to them? When you spend money, do you talk about how that expenditure aligns with your goals and values?

You might be surprised. Many young people feel pulled along by the expectations of parents, schools, and society to do well academically and land a high-paying job. Then they find themselves succeeding – working at a prestigious company and making bank – but feeling empty inside.

What does your child really want? As parents we hope they’ll be safe and secure. But safety and security may not equal happiness. Maybe they want to travel the world. Or start a business. Or have the freedom to do as they please.

Working towards something makes spending less on unnecessary things easier than simply an abstract idea of saving for saving’s sake.

3. Pay yourself first

This little trick holds powerful potential for long-term financial success.

It’s a mindset as well as an action. Talk with your kids about mentally lopping off 10% (or whatever percentage works for them) from ANY income they receive, whether from a job, a side hustle, or from the birthday gift Grandma sends.

Make it an automatic habit to save that amount before spending anything. Then watch those savings grow.

4. Don’t spend tomorrow’s income

So many people get into financial trouble because they count on future income. This may be a bonus they expect at work, or a raise, or money from a side hustle, or even a gift or inheritance. Then they spend the money before it comes in.

But what happens if it doesn’t come in? If that bonus never materializes or the side hustle client doesn’t sign on? Talk with your kids about never buying anything unless they have money in the bank to cover it. From a cute sweater to a trip abroad, buy it only when the money is already sitting in their account.

5. Harness the awesome power of compounding returns

Open an online investment calculator and show your kids how they can turn $1,000 into $1,800 over ten years, into $3,200 in 20 years, and into over $5,700 in 30 years if their investments return a modest average of 6%.

By doing nothing but leaving it alone and letting it grow.

And then show them what happens if they invest an additional $1,000, or more, every year. You just might blow their minds. Albert Einstein said, “Compound interest is the eighth wonder of the world. He who understands it, earns it. He who doesn’t, pays it.” Wealth builds if they start to invest when they’re young.