No generation has more money at their disposal, with more pressure to spend it than those born into the 21st century. The challenge for you as a parent is to educate your children about money; its value and the values of restraint and responsibility that must come with it.

If parents do not step in, your child’s peers and the media will. And they will learn the worst things about money: That clothes and gadgets are who they are, video games and allowances are their birthright, and credit cards will satisfy all their whims and fancies.

In short, if your children grow up not knowing the value of money, they will lose control and spiral into money troubles as an adult.

So what should your child know about money?

The early years are crucial. You’ll be amazed how quick kids as young as four can pick up rudimentary money recognition skills. They will if you let them, because before the age of 8, they should grasp:

• That money buys things
• That money is limited
• Some basic money recognition skills
• That two 10 cent coins is the same the one 20 cent coin
• The concept of receiving correct change for small amounts

As children approach 12 years of age, they already possess a wealth of knowledge about money, but parents are still their most important source of financial information. But their knowledge of money and finance are full of gaps that need filling. And before your children reach 12 years of age, they must:

• Understand where money comes from
• Be given a limited allowance and know how to manage it
• Know how to save for something they want
• Know how to compare prices
• Have their own savings account

The teenage years are a time of revelation for you as a parent. Your teenagers will need bigger allowances to feed bigger expenses – rightly or wrongly. These few years provide the best opportunity for parents to plant seeds of financial acumen or risk leaving it to nature. Hence, by the time they’re above 16, they should know:

• That money grows when they save or invest it
• How to manage their allowance and expenses on a balance sheet
• How to be responsible for their own ATM and debit card (no credit cards!)
• How to stay or get out of debt
• The very fundamentals of how to make money grow

For more advice on raising a money smart child, head to "Parents’ Resources" section at www.moneyclinic.sg

Give your children a head start with customised, learning-through-play programmes at The Money Clinic.