Basic money management is rarely taught in school. And few parents discuss money with their kids at home. That only leaves millions of children at a disadvantage. Many children come to adulthood without even a cursory knowledge of personal finance. Consequently, adults tend to learn money management by trial and especially, by error.

Kids who do learn about money early will be way ahead in the game. Just as important, learning to deal with money properly helps foster discipline, good work habits and self-respect.

Here are seven ways you can help your child get a good handle on money management:

Start With An Allowance

An allowance can be a vital tool in teaching kids how to budget, save and make their own decisions. So instead of giving your children money whenever you like, give them a fixed amount at regular intervals. Children remember and learn from their mistakes, when their own money is lost or spent foolishly.

I personally believe that an allowance should not be tied directly to a child's daily chores. Kids should help around the house not because they get paid for it, but because they share responsibilities as members of a family.

Let Children Work Part-Time

Work can boost a child's confidence and teach her the dignity of labour. As children grow older and their employment options expand, they see that they are becoming literally more valuable in their contribution to society. But don't let kids overdo it. Because of the academic pressures they face at school, kids should work only during their vacations.

Teach Them To Save

That, of course, is easier said than done, since kids can be notoriously instant pleasure seekers. You have to provide good reasons for them to save. You might start by limiting the number of special things you give your children, such as fancy bicycles or expensive clothes. Explain that if they want something of greater value in the future, they will have to forgo things of lesser value in the present. Children can start savings accounts in nationalised banks with as little as Rs 100. Point out to your kids that in addition to being safe in an account, their savings will earn interest. In the end, the saving habit will make kids better appreciate what they've worked hard to acquire.

Show Them How To Spend Wisely

Remember, with older children, learning to work with their allowances teaches prudence.

Offer A Preview Of Adult Living Expenses

Children who don't learn about the realities of household budgeting will have to unlearn the bad spending habits they've acquired to help them prepare for the future. Make older teens responsible for a portion of the household expenses. Even getting them involved in paying the utility bills will give them an idea of unavoidable monthly expenses.

Explain The Proper Use Of Credit

Make sure your children understand that borrowing in any form costs money, and that the amount has to repaid in the end. Explain that using credit and credit cards does not boost income nor is it a substitute for adequate planning or saving.

Set A Good Example

Even preschoolers learn by imitation. If bills are a frequent source of family arguments, if saving is neglected in order to make an impression on the neighbours, your kids will probably pick up the same behaviour. Sit back and take a look at your attitudes towards money. Do you use it as a substitute for love? Some parents give their kids gifts to make up for absences. But kids far prefer the affection of parents and the time spent with them. A hug, a smile, a kiss or a moment shared is something money can't buy. And that may be the most important money lesson for all.

Family Riches

Do talk about money at home. Your child should have some sense of the family's financial position - not of course, how much exactly you earn, but what your stand is on spending. Do you feel it is alright to spend money on holiday, or do you feel great pride in getting a good deal? Do you use money to make up for your absences? Do you help your child see the relevance of objects and gifts that may be inexpensive but have been chosen with love?

Also teach children the importance of maintaining records and organisation when it comes to financial matters - and life.