5. Save in an Emergency Fund. Are you familiar with Murphy’s Law? It says that anything that can go wrong, will go wrong. That’s why it’s important to teach your child to put away a few dollars (10% of their net income is a great start) in an Emergency Fund as soon as possible and add to it as often as possible. An Emergency Fund can be kept in a savings or a money market fund at a credit union or bank. The key things to remember are that the money should be liquid in case the child needs it, but not too easy to access so it won’t be spent haphazardly. 6. Teach them to delay gratification. As the amount of money in their retirement and checking accounts grows, your child may be tempted to use the money for things they don’t really need to buy. Since they are adults, you can’t make them do anything, however you can strongly encourage them to leave the money where it is. Joachim de Posada gave a TED Talk where he talked about his experience conducting a longitudinal study, The Marshmallow Experiment, with kids in Columbia. He found that kids that could wait 15 minutes to each the marshmallow in front of them when they were kids ended up with better grades years later. Students that couldn’t wait were more likely to end up with poor grades in later years. If children can learn to delay gratification, they can take advantage of compound interest and build good money habits.