Let's start with young kids age's three to five. How many times do you hear, "Can I have (fill in the blank)?" You probably hear it everyday, or at least every time you go somewhere. Rather than just saying no (or yes), start teaching your children about budgeting and finances by telling them you don't have the money in the budget to purchase (fill in the blank). You can explain to them about a budget by saying something along the lines of, "We only have a certain amount of money each month to spend on things we want and we've already spent it this month." Some children will respond by telling you to go to the bank or ATM and get more money. You can explain that the bank or the ATM is like their piggy bank at home. You can only take money out if you have put money in and right now your piggy bank in the bank is empty and you have to wait to refill it.

When a child hits about six to eight-years-old, they start asking you for money rather than just things. This is where an allowance really comes into play. Kids will spend money all day long as long as it is your money, not theirs. When their money is on the line, they are a lot more conscious about what they do with it. Younger children will start to understand how money works and that sometime sacrifice and saving is necessary to get what you want. Giving your children an allowance also gives you the opportunity to teach them about saving, budgeting, and living within their means. When children start earning an allowance, start by having them pay for their own wants. If your child wants to get a happy meal, allow them the opportunity, but make sure they know they are paying for it. This is also a good age to open a savings account with your kids. Sit down and show them how the bank works, but remember your two rules: keep it simple and keep it age appropriate.

As your children hit their teen years, start introducing savings plans. It is much easier for a teen to understand saving (and want to do it) if they have something to save toward, like a car, a vacation to their favorite theme-park, etc. This is also an important time to not give them money every time they ask for it. You can put a curb on teen spending appetite if you let them spend their own money rather than yours. This is also the time to stick to cash as teens don't understand completely that they have a limited money supply if all they use is plastic. A debit card is not your teen's friend. This is also a great time to teach your kids about interest that works for you and interest that works against you. There are lots of stages in you children's lives that are a great time to teach about personal finance, but remember to keep it simple and keep it age appropriate.