Duluth, Minn. ? As Americans struggle to meet their retirement savings goals and the average family credit card debt continues to spiral upward, area financial educators and advisers stress teaching money management skills to children at an early age.

Basic skills can begin in elementary school with something as simple as a piggy bank and progress to checking accounts and debit cards when high school students get part-time jobs.

Elementary school

During elementary school, parents should explain what money is, how saving works and how simple interest works.

Make clear that saving is about making choices, said Curt Anderson, director of the Center for Economic Education at the University of Minnesota Duluth.

“You’re not saving because it’s fun to save,” he said. “It’s saving the opportunity to buy something else later. By buying a bike now, you’re giving up the chance to buy a video game later.”

Moira and Bill Olson encourage their three sons, ages 7 to 11, to save for a significant purchase or specific event.

“I’ll say, ‘Try to choose something you want to save up for,'” Moira Olson said. “Don’t just have money and think you need to spend it.”

A piggy bank is an excellent tool to teach younger children, who would benefit from having the money close to them where they can see it. To begin introducing interest, add a few coins from time to time so kids can see they will be rewarded for saving money.

As children grow older, a bank savings account is an excellent way to teach youngsters to balance a ledger and paves the way to using other banking tools later.

Middle school

While Anderson maintains the “when” and “how much” of allowances should be determined by the individual family, children should get one by the time they reach middle school.

An allowance begins laying the groundwork for managing a budget. Parents need to set rules on what the parent pays for and what the child pays for.

“The important thing about an allowance is it’s a fixed amount coming in, and they have to budget it,” Anderson said. “It has to be big enough to live with and small enough that they have to manage it.”

Another way to introduce a budget is by giving children clothing and entertainment budgets, said Nancy Gruver, founder of Duluth, Minn.-based New Moon Publishing, which published a book for children ages 9-12 called “New Moon Money: How to Get It, Spend It and Save It.”

Money should be budgeted and allocated on a regular basis, for example, weekly or monthly.

The Olsons first introduced their children to budgeting on a family vacation to Disney World in 2000. Parker, now 11, along with Brody, 9, and Benjamin, 7, sold toys in a garage sale to raise spending money.

On the trip, the boys wanted to play video games in an arcade and their mother told them they needed to use their own money.

“They came back 20 minutes later and said, ‘Boy, we’re really wasting our money,'” Moira Olson recalled.

Deborah Fry of Duluth is considering allowances for her children. She also tries to explain different banking tools to her children, Adam, 13; Amanda, 10; and Anna, 8.

“My girls think that if you have checks, then you have money,” Fry said. She explains she has to have money before she can use checks.

To begin introducing the concept of debit and credit cards, parents can consider the recently introduced prepaid spending cards issued by major credit card companies.

The cards have spending limits set by adults, and parents can transfer money from their own checking account or credit card either online or by telephone, cutting down on the hassle of doling out weekly cash. They also can be a handy alternative to sending a child on a trip with a pocketful of cash.

Parents can view their children spending online or by calling an automated telephone number, and cards issued by Visa also allow youngsters to withdraw cash from an ATM with a PIN. The cards have no interest fees, but do include the grown-up cost of ATM fees.

High school

As teenagers enter high school, begin thinking about introducing more essential financial tools, such as checking accounts and debit cards. Discuss the concepts of borrowing on credit, establishing a credit rating and using investment tools such as stocks, bonds and mutual funds.

A checking account becomes necessary when a teenager starts a job and brings in a more substantial income than a weekly allowance, Anderson said.

Help your child balance the checkbook for several months, or longer if he or she needs it, Gruver said.

Gruver doesn’t recommend requiring a teenager with a paying job to save a certain amount or percentage of his or her earnings.

“If a kid is old enough to go out and get a paying job somewhere, I think by that time they need to be managing that money,” Gruver said. “Parents need to have built the foundation (for saving) before that.”

Make sure your children understand the difference between saving and investing, Gruver said.

“We also need to teach our kids that it’s important to invest money, which means there’s some risk,” Gruver said. “The idea is that the more risk you’re willing to take, the higher the return will be.”

As far as credit cards, Anderson discourages teenagers from getting them until after high school.

“Credit is an indication that you are living beyond your means,” he said. “A credit card is a way to extend the date of payment, but you have to pay to have that privilege.”

Establishing a credit rating is something that can be done after high school.

“Once they go off to college, then there are emergencies,” Anderson said. “Too many people see it as, ‘Oh, I’m rich now, I have a credit line.”‘

Discuss family finances

Finally, parents need to be open with children about family financial decisions, which helps them understand the decision-making process.

When parents get a new car, they should explain why they decided to buy instead of lease the vehicle, Anderson suggested.

Gruver suggested parents get children involved as they pay bills. Let them run the calculator, she said.

“It just opens up the family’s financial situation to the kids in a way that is very natural: OK, there is a process here. We spend money, and then we pay the bills, and sometimes we can’t pay the whole bill, so what do we do?” Gruver said.