It's never too early to teach children about money

I asked my 16-year-old son the other day what he knew about money.

"It definitely doesn't grow on trees," he replied smugly! A witty response, typical of his personality and age, but one that is undeniably true and highlights a universal understanding that you need to work hard for and take care of your money.

The global economic uncertainty over the last five years has raised the importance of educating our children about fin-ance management, and it is never too early to start laying the foundations for skills that our children will use throughout their lives.

Studies vary, but there is a widely held view that the earlier you start to plant the seeds of financial literacy in your child, the better.

Each age group will have different interests, focus and attention spans!

And for each age group there is also a range of different teaching methods to be used.

However, there are a number of simple steps that you can take as a parent to help get your child off on the right footing.

Create a savings plan

Start saving for your children early on and engage them in the saving process. You could start with a piggy bank and teach them how to save for little things that they may want to buy.

As they grow older you could take them to your local bank and open a savings account for them.

Involve them in every step and allow them to share and cherish some of the responsibilities.

Good habits put in place early on are more likely to last with them into adulthood.

Maintain an open dialogue, share the experience!

Talk to your children about money!

We often shield our children from things like bills and household budgeting, but watching is one of the best ways of learning!

Talk them through the routine that you go through on a monthly basis; How do you manage your finances? How do you pay bills? What methods of payment do you use?

Encouraging your children to take part in running the household not only increases their financial literacy, it also raises their general acumen and awareness of what it takes to maintain a home.

Involve your children in small projects

Something as simple as a day out or a holiday can allow you to put to test some of the basic skills in planning and budgeting.

Delegate the responsibility for planning a day out to your children. Let them suggest an idea for an activity and work within a budget to organise it!

This is a practical and fun way to learn and one where the whole family can work together.

Build on the holiday experience

The world of foreign exchange can be a tricky place for adults, let alone children!

Introduce the concept of currency to your children whilst on holiday.

Talk them through the different currencies that they come into contact with and expose them to the versatility of being able to use different notes and coins as a medium of exchange in different countries and cities.

This will open up their eyes to the international dimension of money and finance.

Just as parents invest time and resources in securing the best possible academic education for their young ones, so too should they dedicate time to teaching children some of the softer skills in life which if overlooked could make all the difference between a happy future and a troubled one.

Financial literacy is a crucial skill to be acquired, and parents can go a long way in helping their children to learn the basics.

The writer is Head of Personal Banking for Lloyds TSB Middle East. Opinions expressed here are his own and do not reflect those of Gulf News.