If you're having a hard time explaining that money doesn't grow on trees to your kids, you're not alone.
Personal finance expert and author of the forthcoming book "Make Your Kid a Money Genius (Even If You're Not)," Beth Kobliner discovered that many parents have a harder time explaining how money works to their kids than talking about sex or drugs.
"Part of it is that parents are afraid they don't know enough to talk to their kids, and another part of it is that we're afraid to reveal our own money foibles to our children," explained Kobliner, who also wrote the New York Times best-seller "Get A Financial Life." "That's a problem because we now know the number one influence on a child when it comes to their financial behaviors is their parents."
She's found that there are five common missteps parents make that could actually be passing on bad money habits to their children:
Mistake #1: Waiting until your child is older to talk about money
Not talking to children early enough could be detrimental to their future attitudes about money management. "Cambridge University came out with a study showing that, by age 7, kids' money attitudes are pretty much set," remarked Kobliner. "Research shows now that children as young as 3 can understand basic concepts with money like, when it comes to waiting, I have to wait a few weeks and add up my pennies or quarters or dollars to buy something I want."
Parents should also heed this advice when thinking about college. Waiting until your son or daughter is in the 12th grade is not the time to discuss how much college is going to cost. "Doing it in the ninth grade really is a smart idea because you can figure out then which colleges give more financial aid and not fall into the situation where your kid gets into his or her dream college in the 12th grade and you say, 'Sorry, we don't have the money for it.'"
Mistake #2: Paying your kids an allowance for chores
Kobliner admitted there is no right or wrong answer on whether to give your child an allowance, but she said paying for chores is a no-no. "It's wrong to give your kid an allowance for basic chores like making your bed or emptying the dishwasher, because you want your kid to realize that's part of a family responsibility."
She recommended instead to keep allowances simple — for example, by basing it on your kid's age and being clear on what the money is for.
Mistake #3: Bribing your child to get good grades
Kobliner revealed that nearly half of all parents pay their children for getting good grades. This isn't a good idea because bribes in general don't work. She cited a Harvard University study that found that paying for grades did not actually improve math or reading scores.
"The goal of parenting is to make the motivation come from within versus external factors," she said.
Mistake #4: Teaching your sons but not your daughters about money
Kobliner found in her research that a majority of parents believe boys are smarter than girls when it comes to money and understand the value of a dollar more, making parents more likely to discuss money with their boys rather than with their girls. That's a mistake, as it's equally important for girls to learn financial management.
Mistake #5: Lecturing your kids about credit, without disclosing your own use
The old adage, "Do as I say, not as I do," won't work here. She advises parents to be honest and not hypocritical about using credit cards, because kids see right through it. They will only learn by seeing real-world examples of responsible credit use, which is critical in today's age.
"We're now too accustomed to using plastic," Kobliner said. "More than half of millennials use plastic to make purchases for under $5, which can become really expensive with interest."
For parents looking for more advice, Kobliner suggested they visit MoneyAsYouGrow.org, a project she helped launch as a member of the President's Advisory Council on Financial Capability for Young Americans. The site explains which topics to discuss with children, at which ages.