If there’s one person who understands the importance of teaching kids about financial responsibility, it’s Warren Buffet.

When asked what he thinks is the biggest mistake parents make when teaching their kids about money, the billionaire said, Sometimes parents wait until their kids are in their teens before they start taking about managing money when they could be starting when their kids are in preschool.

Time is a factor

According to a 2018 survey from T. Rowe Price, which gathered responses from 1,014 parents and more than 1,000 young adults, only 4% of parents said they started discussing financial topics with their kids before the age of 5. Thirty percent (30%) of parents started educating their kids about money at age 15 or older, while 14% said they never did at all.

Lessons Buffett Taught his Own Kids

In 2011, Buffett helped launch a children’s animated series called Secret Millionaire’s Club, which featured himself as a mentor to a group of students. There are 26 episodes in the show, and each one tackles a financial lesson, such as how a credit card works or why it’s important to track where you put your money. I taught all of my kids the lessons taught in ‘Secret Millionaires Club,’ Buffett told CNBC. They are simple lessons meant for business and for life. Here are a few lessons from the show, along with tips from Buffett on how to teach them to your kids:

1. How to be a flexible thinker

The goal of this lesson is to encourage your kids not to give up just because something doesn’t work the first time. The ability to think creatively and outside the box will come in handy when they run into future financial challenges.

Activity ideas

Go to an art museum with your kids and discuss the different styles of each painting. Then, invite them to paint something of their own. Turn your trash into treasure by challenging your kids to come up with new uses for old things around the house .This will help teach them how to think critically, save money and help the environment all at the same time.

2. How to start saving money

To help your kids learn to manage their money, it’s important for them to understand the difference between wants and needs.

Activity ideas

Each time they receive money, talk to them about how they wish to split the money between savings and spending.

3. How to differentiate between price and value

We’ve all been guilty of paying more money for a cool brand of shoes or gadget when we could have gotten a similar item that was just as good for a lesser price. The idea behind this lesson is to help kids understand the different ways advertisers get us to buy their services or products, as well as how to tell what is and what isn’t worth paying for.

Activity ideas

Make a list of items you need at the supermarket, and then check flyers, newspapers and websites with your kids for items on the list that may be on sale. Compare those prices and see which store offers the best deal for a specific product.

4. How to make good decisions

The key to making smart decisions is to think about how different choices can impact future outcomes.

Activity ideas

If we don’t, it will be too hot in the house when summer comes. Once the AC is repaired, we can think about buying the TV. Get your kids into the habit of making good decisions about how to save money. Maybe there’s a DVD they want to buy. Ask them whether they really need it or if they can rent the movie from the library.

‘It’s never too early’

Instilling healthy financial habits in your kids is one of the most important things you can do to help ensure they have a successful future.

“It’s never too early,” Buffett said in a Q&A with Yahoo Finance in 2013. “Whether it’s teaching kids the value of a dollar, the difference between needs and wants or the value of saving — these are all concepts that kids encounter at a very early age, so it’s best to help them to understand it.”