In a world of online apps and instant purchases, it can be easy for kids to think that money simply appears out of thin air. It goes without saying that parents can find it challenging to teach their kids the value of a dollar in today's virtual economy. However, the fact that the lines between real money and imaginary money are more blurred than ever is precisely the reason why it's more important than ever for parents to teach their kids about finances early and often.

The hardest part of teaching about finances is knowing where to start. If you're struggling to teach your kids real lessons about personal finance, start with these five simple tips. You just might find that today's small lessons turn into tomorrow's big rewards.

  1. Teach Them To Save

    It can be tempting for kids to splurge on fun items when they receive gifts of cash from grandparents and extended family on birthdays and holidays. While a shopping spree can be a lot of fun, it is also important to encourage your kids to put away some money. Set a policy in your home that your kids have to save 10 percent of every cash gift they receive. They will learn the benefits of delayed gratification when they do this. In addition, it may become a practice that they carry into their adult lives. The best part is that your kids will have a nice savings account to reach into once they turn 18.

  2. Let Them Make Mistakes

    There's a good chance that your kids may want to make an impulse purchase at some point. Go ahead and let them. Even if you know they will be disappointed with the outcome of this purchase, it's important to let them learn on their own. Sometimes experiencing the sting of losing money on an uneducated purchase is the best way for a child to learn that every purchase should be thought over carefully.

  3. Bring Your Kids To The Bank

    While it may be tempting to get your errands done while the kids are in school, make a point to actually take them inside the bank with you once in a while. You can use the experience to talk to them about the role the bank plays in giving out loans, charging interest and keeping your money safe.

  4. Take Your Kids Shopping

    Many parents try to make shopping trips go as quickly as possible because they fear fits and meltdowns. However, older children benefit greatly from shopping with their parents. You can teach your kids the value of every dollar by having them accompany you to the grocery store for your weekly trips. In fact, your kids can be in charge of making a grocery list while sticking to a household budget. You can also use the opportunity to teach your kids how to compare prices and opt for generic brands over name brands when appropriate.

  5. Be Clear About Budgets

    Instead of denying your kids items that they want during shopping trips or family vacations, let them know ahead of time how much money they are allowed to spend. For instance, letting your kids know ahead of time how much they can spend when shopping for souvenirs at a gift shop during a family vacation will allow them to make their browsing more purposeful and focused. Giving them some control over what they pick out will help them to build positive connections with budgeting and finances instead of a stressful, rejection-filled relationship.