The earlier you teach a child about the value of money, the more likely he or she will be prepared for the financial ups and downs of adulthood. Learning how to stick to a budget and how to save, no matter how small the amount, is crucial to their financial development.

A child can learn the basics of the financial world at a fairly young age. Learning the importance of earning interest rather than paying interest teaches them how to manage their financial future.

Obviously, a young child cannot be expected to understand as much as a teenager, nor can they be expected to show the same level of responsibility as a teenager. I have therefore tried to break this article down into age levels where financial aspects of responsibility can be taught and understood.

Children don't often understand the value of money until they are around 8 to 10 years of age. They generally see it as something handed over to get something in return. While this in itself is a basic understanding of what money is about, it isn't something that a young child sees as something that you need to plan or worry about.

While you want to spare your child the negative concerns about the upcoming bills, you can still include them in discussions about the general family budget. You can explain that a certain amount of money is earned and that there are a number of things that must be paid before others. You can explain these in terms a child can understand e.g. we must pay for the power or you can't watch television or have any lights. Better still, if we don't buy food, you will be very hungry and this could make you sick.

Also tell the child that some money needs to be saved for emergencies and for the future. Something a younger child finds easy to understand is a money box. Put a money box in the house and decide as a family what you want to save up for. Make it something fun and show the child how saving some money in the money box regularly gets to that end fun result.

If your child gets an allowance, teach him or her to save a certain percentage of that money and/or to donate some to a charitable organisation. The rest is for their spending. When they have earned interest in their bank account, show them that this has occurred.

When a child is around 12 years old, they may be able to take on a part time job like a paper delivery or mowing lawns so that they can earn some extra money. When they are paid, continue with the theme of percentage saving. This establishes a habit which will contribute to a lifelong money management style.

You may also decide to make their allowance dependent on chores to show them the importance of earning their money. Of course, many teenagers get part time jobs and already understand the concept of earning income. This is the time to introduce to them the importance of paying taxes and managing their own bank account and ATM card.

While they are at this stage, you may want to encourage them to save toward their first car or future education. They may also take on the responsibility of purchasing their own clothes and other necessary items. This teaches them the value of money by seeing what things cost. It is also more likely that they will be careful with their belongings and not take things for granted.

As you can see, all children can learn the importance of money. Allow them to take part in decisions regarding how any extra income may be spent. Have family meetings where discussions can be held around purchases. This helps them to understand the planning and spending of money and why spending limits are so often necessary.