Financial smarts are learned through a lifetime of lessons. I believe that it is best to start at a young age. People who do not learn financial sense in their childhood or teenage years are probably the ones who have the most trouble handling their finances as adults. GoodParenting posted an entry on this topic sometime last week and though it focused mainly on teaching children the value of wealth (with the assumption that you are relatively wealthy), the insights presented are valuable.
I particularly like the point which says “make them accountable for every expense they make and every penny they spend.” I believe that this is part of teaching children how to be responsible financially. I do not know at what age you want to start giving your children allowances but let’s say once they start going to school. With this privilege, parents must instill a sense of responsibility – they must ensure that their children understand that they are to be accountable for what they spend. Parents must also go one step further and be firm in disciplining their children. For example, if the allotted allowance is spent before the next one is due, they should not coddle their children and simply give them more.
What I have shared above is merely my opinion. Surely other parents may have their own point of view in this matter. What about you, what is your stand?