When high schoolers turn 18 and start planning their dorm room décor is about when parents start thinking about teaching their kids a thing or two about personal finance. Because a minor cannot legally sign documents, they cannot open or manage their own financial accounts; as a result, few parents bother to give any sort of financial instruction until kids are in their late teens and beginning to become more independent.

Unfortunately, by this stage of life, financial habits might already be firmly in place. It’s advisable to get kids not just involved but invested in their own financial health from a young age. The benefits of early financial literacy are manifold; financially literate kids:

  • Are more likely to start saving earlier, which means they will have more financial independence in college and later in life
  • Are more likely to start putting money into retirement earlier, which promises a better quality of life during retirement
  • Are more likely to have good credit, which reduces interest rates on student loans, mortgages and other loans throughout life
  • Boast better math skills than those who lack familiarity with financial matters.

To improve financial literacy, it’s important that parents introduce financial tools into a child’s life much earlier than college. Here’s what all kids should have access to as soon as they grasp the concept of money, to ensure they grow up financially literate:

A Savings Account

It is incredibly easy to open a savings account in your child’s name and then transfer ownership of the account to your kid when the time is right. A savings account provides the bulk of the financial literacy benefits; it encourages children to make and save money, to recognize the value of money without giving them the opportunity to waste it. Plus, having a savings account before an ATM card or checking account will give kids the chance to learn how to be patient with accumulating savings and to avoid wasting their hard-earned cash on foolish things.

There are dozens of kid-specific savings accounts on offer from big banks, but before you jump at one of these, you should ensure they come with the following features:

  • No minimum balance or monthly maintenance fees. Fees are discouraging to kids, who don’t fully understand why their money is being taken away.
  • An interest rate. Most savings accounts have interest rates close to 0 percent. You should look for a savings account with an interest rate of at least 1 percent, to teach your kid what interest is.
  • Access online and in-person. Online banking is more convenient for you, but it is beneficial for kids to walk into a branch and interact with the tellers. Hands-on experience making transactions will make banking feel more familiar and less intimidating.

A Checking Account

Around the time your kid gets their first job, even if that job is babysitting in the neighborhood, you should give them a personal checking account. This allows them to reap the rewards of their hard work. While saving should remain one of their top priorities, having experience managing their spending is important — especially well before college, when their newfound freedom can be intoxicating and cause rampant spending. Having a history of healthy spending will make the physical and financial independence of college less uninhibited.

Before you hand over the debit card, you should have a long conversation about what it means to have access to money. You can continue to control their spending by limiting how much money is in the checking account, but you should be able to give your kid more agency to experiment with spending and establish their own healthy habits.

A Credit Card

A credit card is easily the biggest financial responsibility in a young person’s life, so it’s important not to start a credit account when a child is too young to understand its lasting ramifications. Usually, when teenagers start gaining greater responsibilities and freedom, like the ability to drive, it is a good idea to slip a credit card into their financial tool belt. This will get them building credit early, and it will give them an emergency account to use if they are ever stranded or in dire need of funds.

Typically, parents cosign with their teens; your established credit should get them a better interest rate and higher limit. However, if your credit score isn’t ideal, or if you want more control over their credit, obtain a secured card, which requires a cash deposit that functions as the credit line. This will grow your teen’s credit history, giving them more opportunities to develop a high credit score that will benefit them into the future.

Too many parents wait until their kids are college-age to introduce them to the financial tools they’ll need for the rest of their lives. The sooner kids become familiar with crucial financial tools, the better, so before your little ones are heading off to get a degree, you should start giving them access to savings, checking and credit accounts.