Children emulate their parents. We are their first heroes and they will do what they see us do. If we are wasteful with money, they too will be wasteful. However, if we give, save, and spend less than we make, so will our children.
Do not get your children used to an allowance. An allowance only instills in the child that they don’t have to work for anything. They grow up with an entitlement mentality. You want to teach your child that you must work for your money.
A child as young as two can pick-up their toys and put them away. You can tell your child that if they do this chore then they get $1.00 or whatever amount you think this chore deserves. If the child does what you have asked, give them their money. Then, get three cans or jars and label one Give, the other Save, and the last one Spend. Teach your child that everything belongs to the Lord and that he or she should give back to the Lord. Have them place a tenth or more of their money in the Give can/jar, a tenth or more in the save can/jar, and the rest in the spend can/jar.
On Sunday morning, your child is to take the money in his or her Give can/jar and donate it to the church. If you open a savings account for him or her, then when the money in the save can/jar has built-up, take him or her to the bank to deposit their money. Teach your child that when they receive monetary gifts, they should distribute the money across the cans/jars. They will see that by investing their money, it will earn interest and grow.
If your child wants a toy or candy, have them check their spend can/jar before you go to the store. If they have money in there that covers the entire cost of the item including tax, then they can take the money with them to the store and pay for the item. If on the other hand, they are short, then they have to wait until they have enough money. If your child wants to earn money, then give them extra chores to do. Remember to keep the chores age appropriate. You don’t want your two-year-old to do the dishes or vacuum your house.
As they get older, you can increase the chores and amount of money they earn. Also, get your child accustomed to helping out around the house at an early age. Teach them that there are chores for which they will not be paid. These chores they do because they are a part of your family and they love you. If you start early and teach your kids how to save, they will grow up to be savers and not spenders. They will not be looking for a hand-out from the government. If you use credit cards, only charge what you can afford to payoff completely when the bill comes. Teach this to your child as well and they will not get into credit card debt. Remember to teach them that debt is not a good thing to have.