At my children’s first lemonade stand a few years ago, we made more than $100. As I divided up the money between the two boys, I called my husband to tell him about our success.

“Make sure the kids pay you back for the operating costs,” he said.

“Don’t be ridiculous,” I told him emphatically. “They’re 6 and 4 years old. What do they need to know about operating costs?”

He insisted, and it turns out he was right.

“It is never too early to begin talking about money with your children,” a financial literacy expert, Joline Godfrey, said. “A 5-year-old is already learning a lot about money from the world around him. You want to talk about money early on and often, so the subject becomes as normal as brushing your teeth.”

Let your children count out the money at the grocery store and make sure you’ve received the correct change. When you refuse to buy your child a $60 T-shirt, explain why the amount is inappropriate and clarify how much you would be willing to spend. Give your children a budget and let them order up the Chinese food on Sunday night.

For many parents, this idea of regularly talking about money is radical.

“When I was growing up, my parents never spoke about money,” a mother of three said. “It somehow seemed in poor taste to do so. And even though today I know there is nothing taboo about it, I still am uncomfortable talking about money with anyone – even with my kids.”

According to financial experts, though, children eventually pay a huge price for not being schooled in the subject of dollars and cents. According to a 2005-2006 survey conducted by the Jumpstart Coalition for Personal Financial Literacy, a not-for-profit organization that works with young children, the average American high school senior scored 52.4% on a basic financial literacy exam that tested students’ knowledge on topics such savings accounts and insurance.

A new industry has grown up around the need to stem the tide of fiscally illiterate adults. The executive director of one such organization, the Institute of Consumer Financial Education, Paul Richard, advises that giving children an allowance is one of the best ways to begin introducing them to money. Despite the common practice, allowances should not be connected to performing daily chores that are part of regular family life.

“Establish a base allowance for each child,” he said. “If the child wants more money, then create a list of jobs and other duties, which the child can perform at will if they want to earn additional money.”

Ms. Godfrey, the author of “Raising Financially Fit Kids” (Ten Speed Press), agrees that an allowance should not be a reward, and she counsels parents to adopt an allowance mantra: “An allowance is not an entitlement or a salary. It is a tool for teaching children how to manage money.” She tells parents of children between the ages of 5 and 8 to give a child three jars, one for savings, one for spending, and one for donating, and to help determine how much goes in each jar. Allowances should be increased only when the child has shown financial responsibility that is appropriate with his age.

Setting up a bank account is also a good idea.

“You should’ve seen my son’s face when he figured out the whole interest thing,” a father of three said. “It’s one thing to open the bank account and explain to them how a bank works. … It’s another thing for them to receive a bank statement with their name on it and for them to see that a few months ago they had $300, and now, without doing a thing, they have $310.”

Experts agree that parents shouldn’t discourage withdrawals; ideally through their own experiences, children will learn the value of liberal savings and conservative spending.

Young children need to learn to distinguish between their needs and their wants. This lesson is far more easily understood when children are deciding how to spend their own money, as opposed to their parents’.

“My kids want X-Box cartridges. They want every toy they see advertised on television. They want cell phones. ‘I neeeed it,’ they moan to me,” a mother of two boys said. “I tell them that if they neeeed it, they should buy it with their own money. All of a sudden they don’t really neeeed it.”

We all want to raise our children to become independent, balanced, responsible, and self-sufficient adults. We all want to strike that delicate balance between sheltering our brood from the reality that money matters and awakening them to the reality that, well, money matters.

Ultimately, children learn the most about responsible financial behavior from watching their parents. It is probably far easier to set an allowance and open a bank account for our children than it is to model careful and responsible spending. In the end, how you live your life each day sends the loudest message of all.

sarasberman@aol.com