Money is a very important commodity nowadays, and having knowledge about how to handle your money is necessary to have a satisfied life. By teaching your children to become skilled at finances, you will be able to give them the chance to do better in their future with their money. If they start early, they will learn how to make good decisions in savings, spending, investment and other financial issues.
Saving is very important because it helps them feel independent and gives them the power to buy the things they want without asking their parents for too much help. Teach them the difference between spending and saving, and the difference between receiving interest and paying interest.
Once you believe your child is old enough to receive allowance, give them the money in small denominations so that they can set some aside to save. You can take them to a bank to open up their own saving account. Children can start accounting books where they write what they spend and what they save so that they know how much money they have and what they do with their money.
Whenever you go shopping with your child, teach them about how to spend wisely at the grocery through sales, coupons, and comparing prices. Let the children make their own decisions when they buy their own things, so that they will learn from their actions.
When an advertisement comes on TV or any other form of media, talk to your child and help them determine whether or not the advertisement is being truthful and if the product is really worth the cost. Help them tell the difference between scams and honest deals. Also, teach them about spending on things through credit and loans, like how interest can really raise the price of an item.
Remember that credit cards are very dangerous if not used carefully. Tell them about the costs it may entail, the interest that will raise the price of what they bought, the importance of paying bills on time. Set limits on any credit cards you give older children so they don't get themselves into a mess. If your child is able to understand all the lessons you teach them and if they can apply them to daily life, then your child has a bright financial future.