As soon as your children can count, you should introduce them to money, because observation and repetition are two important ways children learn.  What you teach them while they are small can make a BIG impact on their financial skills when they’re older.  

Here are a few tips to get you started:
 
1. Teach children the differences between needs and wants.  They need food.  They want a new toy.  You need to work to provide money for the family; you want to go on a family vacation.  This basic concept will prepare them for making good spending decisions in the future.
 
2. Create a chart for each child and decide together how their money will be used.  A percent should be saved, a percent should be spent, and a percent should be given away to charity or church.  Help them make most decisions, but also allow them to make some spending decisions on their own.  Whether good or poor, they will learn from their spending choices. You can then have an open discussion of spending pros and cons before more spending takes place.
 
3. When giving children an allowance, give them the money in denominations that encourage saving.  If the amount is $5, give them five $1 bills.  This will help them easily follow the chart you have created together.


 
4.  Take children to the bank to open their own savings account. Beginning the regular savings habit early is one of the keys to savings success.  This account will also introduce children to the value of saving versus spending.  Some parents even offer to match what children save on their own to help the account grow.

5.  Set goals and encourage your kids to reach them.  Remember that setting goals is fundamental to learning the value of money and saving. If they ask you for a toy, help them save money and buy it themsevlves.  You can also use this as an oporutnity to teach kids about the negative effects of credit and being in debt by only allowing children to pay cash for the items they want and need.  Explain to them that being in debt means you have to work more to pay the money you owe.
 
Most importantly, talk to them often about finances every chance you get.  Every trip to the grocery store or bank can be used as an opportunity to help give them a great financial foundation.  These are five tips to give your kids a good financial foundation without breaking the bank!