IRRESPECTIVE of how much money we have, and what we can and cannot afford to give our children, how do we go about teaching them the value of money?

IRRESPECTIVE of how much money we have, and what we can and cannot afford to give our children, how do we go about teaching them the value of money?

Money and personal finance are two of the most important lessons we can impart to our children. Later it will become the building blocks of a solid foundation and give them future tranquility, stability and independence.

Part of our role as parents and educators is to teach by example and make sure we are sending our children the right messages about money. Do we overspend unnecessarily? Do we save?

It is never too young to start learning about money. Pocket money is a good beginning. By all means, give the pocket money, but doing a few chores around the house will make the money well earned. This also gives the child a satisfying feeling of self-worth.

Children need to understand that money has to be earned by hard work and it doesn't grow on trees.

Another important aspect to teach our children is choices. If they want a toy and a sweet, explain to them that there is only enough money for one treat and they need to decide which one they prefer. With this ingrained at an early age, as a child gets older, they will know that they have to make spending choices.

Coupled with this is the next step - saving. If the child wants an expensive toy, then you need to explain the concept of saving. They need to forego their weekly sweets indulgence and set the money aside until they have saved enough to buy the toy.

Managing money is about making choices and sometime even sacrifices - the sooner our children learn this, the better.

The teenage years are critical as teens are notorious for their spending habits. How teens channel their financial urges will usually determine how they manage their money as adults.

To help our children understand the concept of financial responsibilities, give them a practical example - make them pay their cellphone bill for a few months.

They will soon learn that instant gratification is costly and short lived and that expenses need to be managed with a budget.

It is also beneficial to introduce children to the family budget and explain to them how the money comes in or is earned and where it goes.

Reviewing the budget with older children will help them get a better understanding of the idea of a budget and financial planning. When they are older, encourage children to budget for their pocket money and work a small amount of savings into the budget. Let them know that it is for their retirement and that it's never too early to start.

Above all, remember that kids are kids and even thought financial responsibility is an important aspect of a child's education, don't become too preoccupied with it to the extent that it becomes an issue.

Proper foundations and money practices will help our children become money-conscious adults and set them on the road to a firm financial future.

l Bryan Hirsch is a director of Pioneer Financial Planning. Visit www.pioneerfinancialplanning.co.za.