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As parents, you want your children to be healthy, wealthy and happy and a good way to help them along this path is to teach them how to manage their money properly so they avoid debt and other financial stress.

It’s a long old task and it starts early on. If you’ve been guilty of bad financial habits then you need to work on yourself as well so that you don’t set a bad example. Enough about you for now, though; here’s how you help your children to form good money habits.

Instil a strong work ethic early on

This is one of the best things you can do when you’re trying to bring up money-savvy children. No matter what field your children go into eventually, the fact that they enjoy work and can wait for the fruits of their labour will help to see them through. As soon as they can wield a sponge and a hose, get them washing your car – and your neighbours’ cars – for a couple of pounds. They don’t get paid until all the suds are rinsed off and the hubcaps are gleaming, though…

Make sure they actually leave home

There’s a growing trend – blame the economy – for adult children to return to the parental home with no firm plans for the future. Of course, if they’re in need of serious help, or if they’re saving for a house deposit, then welcome them back. This welcome has to have a shelf-life, however, to avoid your adult kids taking up permanent residence and then not doing the washing-up.

Let your child make mistakes with money

We’ve all been there, standing in the shop looking at some overpriced gewgaw that’ll eat up this week’s pocket money. If your child buys this trinket, it means no sweets or magazines until next week. If they’re insistent about the shiny tat, let them buy it and then feel the burn for the next five or six days. It’s better to waste £5.00 while you’re still at primary school than £500.00 when you’re struggling through university.

Similarly, if they break something, they can help to pay for it. That £5.00 pocket money can be sequestered each week until that PlayStation controller is replaced. It’s a harsh, but vital, lesson.

Send them on a finance course or arrange a talk at school

Not all schools teach anything about personal finance. There’s the pretend shop and till at nursery, then nothing until the kids are in their early-to-mid teens. This is too late to ingrain good financial habits, so teaching your children about bank accounts, credit, compound interest and budgeting from the age of six or so is vital if you want to bridge this gap.

You should also teach your children the basics of investing and let them play with a dummy investment account for a while. If they grasp the concepts behind investing in commodities, companies and indices, then you could let them have a go for real (with supervision).

All of these lessons will teach your children that money isn’t to be wasted or feared – it’s a tool that can be manipulated and used to make their lives more comfortable.