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As parents, we all want our kids to get the best possible education. A deficiency of the school system, however, is that it rarely teaches kids about the importance of money management and how to avoid debt. That educational responsibility is left, by default, to parents. We should not underestimate the importance of teaching our kids money skills, as our children's ability to accumulate and manage money may go a long way to determining their future happiness. Let's look then at some of the things that parents can do to instill good money management skills in their kids.

1. Teach your kids the value of money:

If you buy everything that your child craves, then they will probably grow up ignorant of the financial realities that adults face. Even if you buy essentials such as school uniforms, it is good to give your child an allowance and then let them make decisions for themselves on what items they buy with their money. This will teach them that they have a finite amount of money to play with and that they need to evaluate which items they really want. This teaches them the concept of opportunity cost; that if you buy one item, it may be at the expense of buying another item.

2. Introduce them to the savings habit:

When your kids are still very young, you can buy them a piggy bank and encourage them to fill it. There are some very cool piggy banks that can be found in shops, and hopefully your child will find a simple satisfaction in gradually seeing their piggy bank becoming fuller. As a kid, I had a piggy bank that required a key to open it and I liked to tip all my coins out and count my wealth from time to time.

Of course, it will be tempting for your kids to spend all their pocket money on sweets and toys but there are ways that you can encourage a regular saving behavior. One approach is to make them aware that putting money aside each week can enable them to save up for that special toy that they've had their eye on but which costs more than their weekly pocket money. Another approach might be to incentivise their saving by saying that if they save some money, then you'll match that amount or pay them a bonus. This is effectively teaching them that one of the benefits of saving is that your money can grow.

As your kid gets older, you can also open a bank savings account for them. Some of these come with pay-in books so that it's easy to keep track of how much money is in the account. Hopefully, the ground work that you've done on instilling savings habits

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