1. TEACH BY EXAMPLE. Parents who are careless with money are more likely to raise children who share their attitudes about finances.  However, kids whose parents are responsible with their spending will grow up understanding the value of a dollar.
  2. DEMONSTRATE THE WORK-MONEY CONNECTION. Many parents lavish their children with toys and expensive gifts with no strings attached. But kids who earn money through chores, save up for expensive purchases and learn the concept of delayed gratification will be properly prepared when they enter the real world.
  3. DON’T USE MONEY AS A REWARD. Children shouldn’t feel entitled to money as a result of good behavior.  Grown-ups don’t earn $2 for eating all of their carrots or brushing their teeth.  Parents should set basic expectations for children’s behavior, without any promise of payment, and provide money in exchange for chores and other work.
  4. DEVELOP EARLY BUDGETING SKILLS. As your kids acquire money from chores, birthdays and other gifts, help them budget upfront.  Create three jars labeled Spend, Save and Give.  Each time they receive money, they must choose how to allocate that money themselves.  Help them stick to the plan when it comes to spending and saving to drill in the money-management lesson.
  5. OPEN A SAVINGS ACCOUNT. Parents can teach their children the basics of banking by helping them open savings accounts in their own names.  Kids will learn important financial lessons by watching their accounts grow or shrink depending on how they manage their money.
  6. ENCOURAGE OLDER TEENS TO GET A JOB. Teens are less likely to be cavalier with money when they understand what it takes to earn it.  A job outside the home can teach teens responsibility, discipline and time management.
  7. TRY AN OBJECT LESSON. Parents can use a time-tested technique to teach their kids the concepts of discipline, saving and interest.  Give children one chocolate, candy or other treat and tell them they can eat it now or wait a few hours to earn two treats.  Studies show that kids who learn how to delay gratification experience greater happiness and success in life.

by Mike Sullivan: the director of education for Take Charge America, a national nonprofit credit counseling and debt-management agency.