Every generation comes in contact with money earlier than the last, so it makes sense to make kids money savvy as early as possible. After all, a child who has money sense will most likely grow to be an adult with a good bank balance. Here are strategies to get your child acquainted with money management:
• Lead by example: If you show you are responsible about money, your child is likely to learn that money management is positive, lifelong habit.

• Stress savings: First, get your child a clear plastic jar into which her savings can be dropped. Agree with her that each time it gets full, the money will be transferred to the bank account that you’ve opened in her name.

• Get her banking: Make a big deal of each deposit, so he has a feeling of achievement. Explain how the system of interest works, and show her in her bankbook how money grows in a bank.

• Take her shopping: Children sometimes don’t understand the system of buying and selling, i.e. they can be confused about who gives and receives money when a purchase is made, and they may therefore, not understand that you need money to buy things. Taking her with you to the market can go a long way in demystifying the system.

• Be wise about allowance: Give your child an amount after due consideration. What is she expected to pay for from her allowance? Does it comprise money that she must use for lunch in school, or for buses and autos? Can she spend it as she likes or do you have some ground rules on what is out of bounds?

• Help her in spending: It makes sense to give the allowance in small denominations so that she can better make decisions about it. Help her also work out the modalities of needs, wants and wishes.

• Involve her in budgeting: To help her get an idea of the different expense heads in the real world, a child needs to know of many services we use on a regular basis. Let her see the monthly telephone paper and electricity bills. If she is old enough, she could track expenditure estimates and actual spends in a book. Any money unexpectedly left over could be spent on a family treat like a movie.

• Talk about credit: Don’t raise a veronica lodge. Make sure your child knows that paying by credit card should be for convenience only, and that no bills covered by credit must be paid for. Also explain how the debit card is different from credit card.

• Reward good financial behavior: Consider matching savings at a present ratio.

• Don’t make too much of money: Being too tight with money is as much of a problem as being too easy. Misers often make horrible martial partners. Give money its place, but don’t stress so much on saving it that your child loses perspective.