In Indian middle class society, children spend hundreds of millions of rupees in pocket money and influence hundred of billions in parental expenditure. But then, these children face money problems like saving, budgeting, spending or wasting it. Unfortunately, basic money management is rarely taught in schools and as a result of which, thousands of children are left at a disadvantage. Many children turn into adults without even a cursory knowledge of personnel finance. Consequently adults tend to learn money management by trial or you can say, by doing errors. Kids, who learn about money management early in their lives, will be way ahead of the game. Because learning to deal with money properly will foster discipline, good work habits and self respect. Here are many ways in which you can help your children with a good grasp of how to handle money:

Start giving them allowance at an early stage:
An allowance can be a vital tool for teaching kids how to budget, save and make their own decisions. So instead of giving your children money whenever they want it, give them a fixed amount at regular intervals. To set an appropriate allowance for your child, work up a weekly budget, because younger children may find a monthly allowance too much to handle. Experts advise that an allowance should not be tied directly to a child’s daily chores. Kids should help around the house not because they get paid for it, but because they share responsibilities as a member of a family. You might however, pay a child for doing extra jobs at home. That can develop his or her initiative.

Make them take up part time jobs:
Work can boost child’s confidence and teach him a dignity of labor. As children grow older and their employment options expand, they see that they are becoming literally more valuable in their contributions to society. But don’t let children overdo it. Because they have the academic pressure to handle at school, so kids should work only during vacations. Nowadays, older teenagers in metro cities often find work in western style fast food restaurants, shopping malls, in boutiques, or with market research organizations.

Tell them how to save:
That, of course, is easier than done, since kids can be notorious instant-pleasure seekers. You have to provide good reason to save. You might start by limiting the number of special things you give your children, such as fancy bicycles or expensive clothes. Explain that if they want something of greater value in future, they will have to forgo things of lesser value in the present. In the end the saving habit will make kids appreciate what they have worked hard to acquire.
Tell them how to spend wisely:
For older children, an allowance teaches shrift. By rarely purchasing expensive designer items, they can purchase more clothes. They also learn the tact of buying second hand books and selling them after they’ve read them.

Teach them how to use credit properly:
Make sure your children understand that borrowing in any form costs money. It is not a way of boosting income or a substitute for adequate planning or saving. Rather, it is used for emergencies, to take advantage of highly unusual buying opportunities.
Children, even preschoolers, learn by imitation. If bills are a frequent source of family arguments, if saving is neglected in order to make an impression on the neighbors, your children will pick up the same behavior. Do you, for instance, ever use it as a substitute for love? A hug, a smile, a kiss or a moment shared is something money can’t buy. And that may be the most important money lesson of all.