Financial literacy isn't a one-shot deal; it's actually a lifelong process of learning.
The best course of action begins when your child is two-three years old and builds as he or she grows and develops.
Allowance wise Children age 9-12 years, also known as tweens, will learn a lot from getting an allowance.
But be careful.
When you were a kid, allowance was probably based on your age or grade level and given as a reward for doing your chores.
Nowadays, that concept for giving allowance has become quite controversial.
Many parents do not believe in giving allowance at all but this may be a good time to reconsider your reason and your method.
There already exists some very creative ways to give allowance so you don't have to come up with ideas on your own.
Let them earn Many experts do not believe in giving an allowance for chores but it is very encouraging when tweens have an opportunity to earn money for doing additional tasks around the house.
Make sure these are not their regular chores.
It could be a special chore from a neighbor or something that is not part of their daily routine.
This will help your child understand the importance of "earning" and at the same time learn to appreciate the money you spend on their needs and wants.
Be open Include your child in discussions about purchases that he or she will use or reap the benefit of, such as bedroom furniture, a television or a cell phone.
You should be open with your child about money, especially when a purchase will require a trade off.
For example, "If we buy the cell phone, we can't buy the TiVo.
" Start saving You can choose to buy a happy-looking piggy bank or you can take your child to a real bank but whichever you decide, now is the time for your child to start saving.
It would be bonus if you can find a bank that provides activities and incentives to help your child learn financial basics.
Showing your child how a savings account works and helping him or her set a short-term savings goal, for an item they really want, will teach them to enjoy making deposits.
Help them set goals Do not set goals for your children, instead help them set targets for themselves.
Once they have accomplished a short-term savings goal, it's time to explain long-term savings and help your child create a financial action plan.
Teach your child to practice daily or weekly savings to hit his or her target.
If your child misses the goal, talk about the challenges they faced and encourage them to try again.
Don't let them get discouraged and you can't lose hope either.
Believe that your child is capable and even if he or she doesn't seem to be listening, keep at it and one day you will have a disciplined saver.