It is important for growing children to learn how to handle money from an early age so that they will become responsible money managers.

Children should know the following about money:

1. Money is not easily available.
2. You must earn your money.
3. How much you want and how much you have will not always match.
4. Money is not everything.

Ten year olds are ready for an allowance plan which will help them handle their expenditure. Their expenses will determine the allowance.

Find out from children their daily expenses e.g. on school snacks.

Instead of giving them more money everyday, give them less every week to manage their expenses.

If the children tend to spend more because they have more in their pocket, they will learn that money is a scarce resource when you do not replenish mid-week.

The money allowance can gradually be increased as the children become more responsible and it can be linked to chores in the house, e.g. putting away books, keeping the room clean, cleaning cars, etc.

You must insist that work be 100% complete to be eligible for an allowance. Shoddy work should not be condoned.

Seriousness must be instilled in this process. This will teach children that money has to be earned and understand that time and effort goes into earning money.

Children should be encouraged to put aside money as savings for planned large expenses like gifts for Christmas, birthdays, etc.

They can put away part of their allowance starting 2-3 months in advance.

The children can also be taught the three box idea which refers to giving them three boxes labeled 'spending', 'saving', 'sharing'. Instead of telling children what to do with the money earned, tell them what not to do. They should be permitted to do what they want within boundaries.

They can experiment with speculating or loaning others. If it goes wrong, they learn from it.

Review with the children once a month what they have been doing and what the have learnt from it.

Learning is a continuous process for both of you and will make all the difference to the children later in life.

Children who have been taught to mange money from an early age will be better savers and better investors and will make sound decisions later in life.

Learn to teach your children how to manage money and it will save you a lot of grief later.