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By Rachel Goodchild

Rachel Goodchild is a parenting and education specialist. She's worked as a nanny, teacher and lecturer and is the author of over 25 educational titles.

Financially savvy children grow up to be well-off adults, so it is an excellent idea to teach your children about money.  No matter what your own relationship with money is, by helping your child build a strong understanding of how money works, you will help them develop a sound foundation in using money effectively.

Children aren't born knowing about money. They learn their financial attitudes and skills from their most important teachers - their parents. Your child is watching you every day.

Take the time to educate your children about what money is, what credit is, and how to save money for a rainy day. Let them see you put back items that you cannot afford, or take good care of your posessions. Take the time to explain to them that each action is a financial choice, one that you are making so that you have more money for things that you make a priority. 

Along with teaching your child about money, take the time to teach them about work, as well. Let them see that you work hard for the money you earn, and that you exchange hours of your life for those paychecks.

When they ask you to purchase frivoulous items, explain to them that you will have to work x number of hours to pay for it. Would they rather have the item, or more time with you? It's important for your children to learn about the exchange of time for money, so that they realize that money doesn't just magically appear in your wallet. 

Teach your child that money is finite. Help them to understand that they must make choices about how to spend their money, as they only have a limited amount. Remind them that this applies to their mum and dad's money, as well.

Demonstrate for them how to purchase items on sales, clip coupons, and purchase quality items for the best possible price. Doing so will help them to learn the value of a dollar and how to make their money stretch as far as possible. 

Make rules in your home for how money is handled. When your child receives money, either as a gift, an allowance, or by working for it, make rules for saving and spending. Open a savings account for them, and make it a requirement that a predetermined percentage of all their money be put into it.

Let them set a goal to save for, but be sure to reinforce the act of saving. By doing so, you'll be teaching your children a skill that many adults have not yet learned - and a valuable one, at that! 

As your children grow, allow them to take on odd jobs at their age level, such as walking dogs, mowing grass, and so on. You'll be providing them with a sense of responsibility and ownership, and allowing them to earn their own money.

You may be surprised at how reluctant they are to spend it, once it's earned. It's much easier to spend money that is given to you than it is to spend your very own money that you've worked for. You may find that your children arefar more careful about the choices they make with money they've put a bit of blood, sweat and tears into accumulating.

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