Teaching financial values early in life can help promote lifelong savings habits. Will your children be smart about money? The answer depends a lot on you.

Many people get their money values from their parents. That's why it is important for parents to teach by example and talk with their kids about money at an early age. In fact, handing children money without showing them what to do with it could possibly leave them lacking in money smarts. Experts suggest that it is possible to instill smart money values in children starting at a young age. Experts have outlined some strategies for each stage of a child's development that can help you raise a money-smart child.

Pre-school — Ages 3 to 6 years old:

While kids in this age may lack sophisticated cognitive abilities enjoyed by adults, they do enjoy a tremendous aptitude to observe and learn. In fact, science tells us that 90 percent of a child’s critical brain development happens by age 5. This means that it is never too early to start teaching young children the skills that they will need for the rest of their lives. One critical skill is the art of money handling.

Of course, at such an age visualization is the best approach. While kids in this age bracket won’t fully understand the value of money as an abstract concept, they should be able to associate money as a way to get the toys they like. For example, instead of buying toys outright all the time, parents can teach their kids the value of saving by using a clear jar with a line marked on the side and explain to their kids that they need to fill the jar to that line with their own money in order to get a specific toy. Each time the child puts money in the jar; he/she can see the progress toward the goal. The idea is to connect the buildup of money to the desired toy. The point is that saving using visualization is critical at this age.

Elementary School — Learn through trial and error:

At this point, kids are starting to understand what money can buy and learning the value of different bills. But they can still need visual aids to help them save. While it is still a good idea to stick with the savings jar concept, kids at this age can handle multiple jars for multiple objectives. For example, giving your child a jar for big-ticket items and another for charity should encourage goal setting and starts to introduce the idea that there are different things kids can do with their money. At this age, it is advisable that parents start giving children weekly or bi-weekly allowance and supervise them manage the money.

Middle School — Show a variety of purposes of money:

Children at this age are generally old enough to understand that money can have multiple uses. They need to understand that money can be saved for long term objectives, such as for college education, emergencies, and of course, to get things they want.

Try teaching your kids the value of money through a "bucketing strategy." This means putting a certain amount of money away for different purposes. They might have short-term goals such as buying a new phone or a bicycle and also longer-term goals like saving for a car. A bucketing strategy can help you — the parent — teach kids that saving isn't meant for "leftover" money, and should ideally come before any discretionary spending. Also, matching your kids’ savings can be a great way to encourage and nurture their saving habits.

High School — Keep track:

With college on the horizon, parents need to set the foundation for budgeting. While kids in high school may not be financially independent, they will likely have to manage their own money to a certain extent.

To make budgeting meaningful, your child should be earning some money—perhaps through a summer job, or better yet through an internship. Research indicates that children may be more careful with what they've earned than with money that is just handed to them.

Learning how to budget is a matter of building on what your child has learned up to this point:

• Money is a means to an end

• Money has different purposes

• Money saved is money earned

Keep it simple. Help your child write a list of what he has to pay for with his own money and assign a cost to each item (gas, clothing, pocket money etc.). Split the list into needs and wants, and then have your child try living on what he has budgeted for a few months as a "trial run" before college.

A great resource parents can use:

For those parents looking for ways to educate their children about money matters, SEDCO Holding, the giant Saudi conglomerates, has developed Riyali — an innovative and first-of-its-kind financial literacy program as part of its social responsibility efforts. With Riyali, young adults can take advantage of its interactive tools to learn about important money aspects such as budgeting, saving and investing. SEDCO Holding has also developed a simple to use Riyali phone app which can be downloaded at Apple Store and Google Play. In addition, for those interested in receiving ongoing tips and insightful best practices should follow Riyali’s twitter account @riyali_ksa.

Final thought:

In today’s increasingly commercialized societies, personal debts are spiraling out of control. To raise children and young adults who are money smarts, parents should start educating as often as possible and as early as possible. Financial literacy has become a core life skill that will continue to bear fruits long after your children leave their school years behind.

— Khaled Ali Almushare is VP of marketing at NCB Capital.