Parents should be honest when teaching their children about finances, money guru David Bach says.

"Money should not be a taboo subject," he says. If you are in debt and experiencing money woes, share your problems with your children — don't keep them behind closed doors.

The best-selling author of "Debt Free for Life," Bach says his family taught him about investing and the value of money at an early age. His grandmother helped him buy McDonald's stock at age 7. He is passing along some of the same lessons to his own 7-year-old son, Jack.

Watch the video below for more tips on how to teach your kids about what things cost, the importance of savings, strategies for allowances and how to give to charity. Our favorite lesson: how a child can turn $5 a day into a half-million-dollar cash stash.