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I wish that I had learnt more about saving money when I was a child. In the house I grew up in talk of family finances was taboo, and the concept of allowances didn't make a lot of sense (growing up on the farm, everyone was expected to do their part - monetary reward didn't enter into it). As such the little money I got from Christmas, birthdays and other occasions all went into the bank - piggy or otherwise, and I was never given a compelling reason for spending any of it.

The result of all this frugality was that by the time I was 17 (and finally getting out on my own in the world) I had accumulated a few hundred dollars in savings, all of which I blew on frivolities before my 18th birthday.

Imagine if I had invested that few hundred dollars, even in GIC's or other guaranteed investments. Today I'd be sitting on thousands, which I could use to buy a vehicle, make a down payment on a house, or whatever else might make my life easier. Teach your kids the value of saving!

But more than that, teach your kids the value of money in general. True, it can't buy happiness (despite mounting evidence that rich people seem more content with their lives than poor people), but money can buy piece of mind, and free you from one of the biggest sources of worrying you're likely to encounter in your life.

I firmly believe that children should be doing chores around the house and earning an allowance for it from the time they start going to school. Parents can pick tasks that are age-appropriate, and the allowances should end once children have a part-time job of their own (though the chores shouldn't - you have to make it clear that helping with the housework is everyone's responsibility).

Kids need to be taught how to save a portion of their allowance every week, so that they get used to putting aside a portion of their pay checks later in life for major purchases, investments, or retirement. Ten per cent of a $10 weekly allowance isn't much, but over time it will add up and kids will understand the whole idea.

Resist the temptation to buy your kids the things they want, but rather make them earn and save for them. Going to the "Bank of Mom and Dad" is common during the teenage years, where the requests for new clothes, music or technical gadgets will often be persistent, and backed up by multiple, sound reasons for you handing over your money. It's best to break them of this habit long before they develop it. Make sure you give them the things they need, like food, essential clothing and a roof over their heads, and let them buy the ipods, Playstations and booty-licious outfits for themselves.

The most important thing about money for children to learn is to save and spend with care. Knowing how to balance your needs and wants today with your needs and wants tomorrow is the essence of money management in adulthood.

Teach your children the value of saving, and the value of spending wisely. I know I will.

Learn more about this author, Eric Goudie.
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