IT'S easy to think your money habits are no one's business but your own. However when you have kids, nothing could be further from the truth.
Children, and especially teenagers, pick up a great deal from their parents' attitudes to money, and the message we send our kids about the way we handle our personal finances can stick with them for life.
In today's complex world, teenagers can be called on to make quite sophisticated financial decisions like selecting a mobile phone plan or comparing shopping deals offered online. That makes having a good understanding of the basics of money management just as important for children as reading, writing and maths.
Many financial institutions are making a worthwhile contribution, providing school and community-based programs aimed at helping kids develop key money skills.
Research group Canstar for instance, recently named the Commonwealth Bank as the winner of its Youth Banking and Education Award. Hume Building Society picked up the equivalent gong among the mutual banks, credit unions and building societies.
However it's mums and dads who play the pivotal role in helping their children develop sensible attitudes to money, and one of the best lessons kids can learn is the value of regular saving.
Getting children into the habit of setting aside a set amount of cash each week, fortnight or month can establish a pattern that could last into adulthood. Opening a savings account for your child provides practical experience in saving, with the added plus that interest can help their nest egg grow.
Primary age children are unlikely to need a transaction account, so look for a savings account that charges no fees and offers a decent rate of interest. Watch out for any conditions that may be imposed for your child to earn the top rate.
Secondary school students are likely to need a more functional transaction account especially if they have a part time job. Parents can use this as an opportunity to explain how bank fees can be charged, and discuss steps your child can take to minimise the cost.
Along with an everyday account, it's a good idea for high school kids to have a savings account. The two can be linked so that only a small amount of cash is held in the everyday account while the remainder of their savings continues to earn reasonable interest.
Parents can also help children establish saving goals. Even primary aged kids can follow a simple budget that shows how much they need to save each week to reach a particular target.
The key is to get children thinking about their money, and how they put it to work to their advantage.
If you're looking for inspiration, ask your school for age appropriate material they may have on financial literacy, or check out the 'Teaching your kids about Money' section on the government's Money Smart website www.moneysmart.gov.au
Paul Clitheroe is a founding director of financial planning firm ipac, chairman of the Australian Government Financial Literacy Board and chief commentator for Money magazine. Visit www.paulsmoney.com.au for more information.