“Money doesn’t grow on trees.” Every parent says this to their children when attempting to teach them about managing their finances, or trying to curb their spending.

The thing about keeping kids in the know about money matters is that kids learn their financial habits from their parents.

“Experience is not the best teacher. Learning from other people’s mistakes is the best teacher,” according to wealth coach and author Chinkee Tan. Keeping them in the know about your financial situation helps, but should you tell your kids everything about money?

On Income

Ordinarily, how much you make is closely guarded information. You never discuss specific amounts with friends and other adult family members, but what about your kids? As kids get older they’ll have questions about money, and you’ll need to be ready to answer.

What to say: Use broad terms when discussing the money you earn. The most important lesson your children need to take away from a conversation like this is the value of a paycheck and working hard. Sharing actual numbers is something best left for when they’re closer to working age.

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On Spending

Kids will wonder how you can afford certain things, or why you won’t buy something that want. They’ll likely get the impression that you’re fairly well off if you buy new appliances and other necessary big ticket items, and become confused as to why you suddenly don’t have money for the latest toy they want.

What to say: It’s a discussion of wants vs. needs. Let them know how much it costs to pay the bills, and ensuring that the household has all the necessities. Using groceries as an example, you can give them a concept of how much you spend, and how wants somehow fit into the picture.

On Saving

Because they don’t tend to think about the future, kids may not understand the value of setting aside money for a purpose. It might be easier for you to say “we can’t afford it right now” versus explaining to them that the reason they can’t have the gadget they have their eye on is that you’re saving the money for something more important.

What to say: In this case, it’s an idea to show them what you are saving the money for, given that kids can be visual. Explaining the reason for saving and why something they want cannot be bought while you’re saving shows them a conscious decision to delay gratification.

On Borrowing

Using a credit card or taking out a loan may express the idea that money is infinite and cultivate bad spending habits in your kids. Whipping out a credit card at a moment’s notice may give off the wrong impression, as might getting a loan to buy a car or make improvements on your home. As financial educator Sam Rennick says, “The overriding goal is to teach kids to be thoughtful about what they do with money.”

What to say: Explaining to kids that using a credit card or borrowing money of any sort means paying for it later on. Consider using their allowance or times they ask you for money as an educational tool to show them about borrowing and interest.

Of course, it isn’t necessary to bombard your kids with information when they start to ask about money. As awkward as the discussion may be at the start, how much you tell your kids about money – and when – can spell the difference between having a money-smart kid, and one that worries about money constantly.