In an era when consumers can purchase merchandise and deposit money into a bank account using a smartphone, teaching money smarts to children can be fraught with complications. April is Financial Literacy Month, and local financial advisors say teaching children how to manage their money responsibly is a necessary part of becoming a financially responsible adult.

“How a parent treats cash is the way their kids will treat cash; lead by example,” said Andrea Foster, professor and department chair of Business, Economics, Accounting, Computer Applications and Paralegal Studies (BEACAPS) at Montgomery College. “If your kid sees you cutting coupons and budgeting, when they grow up they will do the same. They will see the benefits and the value of your thriftiness. “

One of the most important financial lessons that a parent can teach is how to save, advises Foster. “Teach them how to budget so that they can learn how to save for what they want,” she said.

Children pay attention to and learn from the ways in which their parents manage money and it’s critical that they learn financial literacy at home, suggests Victoria G. Henry, assistant vice president at West Financial Services, Inc. in McLean.

“Explaining the concept of savings early to children is key,” added “It is natural to want to spend everything right away, so it may be hard to understand why it is important to set a little aside for future expenses. Perhaps it could be explained by saying the savings will come in handy if a favorite toy breaks or is lost.”

An ideal time to offer a lesson in saving is when a child receives money as a present for a birthday or other occasion, says Henry. “It is a good practice to have them save even 10 or 20 percent of the gift, and let them have the rest to spend how they want,” she said. “If they decide to spend their fun money on something and then quickly return asking for money for something else, it is a good to remind them that maybe they should think more carefully about how they want to spend their money in the future. This will help them get into the practice of making wise choices with spending and saving down the road when they start earning money as well.”

Foster also suggests helping children develop savings goals.“[Whether] by piggy bank, envelope, can, or jar, a vessel is an important tool for teaching kids how to save for major milestones,” said Foster. “Identify a goal for the saving and have them save towards that goal.”

Transparency builds enthusiasm, adds Foster. “Using a clear jar for saving creates enthusiasm and motivation as the kids see it fill up with the coins,” she said. “[Saving] also teaches then self-reliance and not counting on their parents to help them for everything. By giving a reward, kids can learn the value of money and how to spend money.”

Foster also suggests encouraging children to keep a spending diary and limiting the amount of money they can spend or the number of items they can purchase when shopping for themselves. “Show them that stuff costs money,” she said. “Have them keep track of all the money that mom and dad spend on them in one month, from food to clothing and other things. They will realize how much it costs to maintain them and how much all the stuff that they want costs.”

Involve children in a family’s charitable donations, advises Henry. “Ask your children to think about what kinds of charitable efforts the family should support,” she said. “Have them research and pick a charity and then make a small contribution to that organization on their behalf.”

“Have children earn their allowance and let children experience the pain of not having enough money if they don't budget correctly,” said Dr. Brian Hollar assistant professor of Accounting, Economics & Finance at Marymount University. “Experience is a good teacher and learning when the stakes are low is invaluable.”

Hollar underscores the importance of teaching solid math skills. “It's hard to develop strong financial literacy without understanding exponential growth,” he said.