There are very few subjects that carry quite as much emotional baggage as money. For most of us, our finances are very private - not to be shared with anyone else. We may discuss even our sex lives but we don't tell others how much we earn. We equate money with happiness and our riches are a measure of our self worth - the more we earn, the better we are. And that's exactly what we teach our children to believe as well. As a result money becomes an end in itself rather than a means to achieving our goals. Also as a result, we tend to use money to control or bribe our children, never fully trusting them with it or teaching them how to effectively manage it.

In most Indian households, parents rarely discuss money with children. If they are well off they may encourage conspicuous consumption as a visible indication of status. The emphasis is also on being popular parents by giving the child everything in terms of material possessions. They thus teach their children to enjoy the money without teaching them how to manage it effectively. In less well off families, parents may teach children that money is scarce and they should be careful how they spend it. Unfortunately, this sometimes translates into stinginess or an attitude where money is horded and worried over but never really enjoyed. The children have learnt saving and earning but they haven't learnt to make use of all that they have saved.

No two people have the same approach to money. Given its emotional associations, it is a very fundamental part of most people's self-identity. It is therefore imperative to teach children both good money management as well as a good attitude towards money in general. For that it is first necessary to look at your own belief system. Do you believe that money is the root of all evil or that exposure to money can spoil your child? The fact is that it's not too much money that causes the harm but too much indulgence in money related matters combined with too little respect for it. If you use money as a substitute for love and attention or a palliative for boredom or unhappiness, then definitely your children will suffer. But the cure lies not in depriving them monetarily in the name of strictness but in teaching them the right values: -

• Discuss money - ask yourself why it's a taboo subject in the home. Is it because you don't want your children to worry or because they'll not respect you as much if they know the truth about your finances? Whether you're very well off or not, a frank discussion of this subject actually makes children feel more secure and more responsible. It also makes them feel trusted and an integral part of the family. Even if your financial situation isn't the best, discussing it with your children will help them feel less frightened and more in control. Discussing it however, does not mean telling them every single frightening detail. It simply means being honest in an age-appropriate manner about your overall financial situation.
  
• Set the right example - don't freak out over money! That means don't spend it as if there's no end in sight and don't hoard it as if there'll never be enough. Children, even preschoolers, learn by imitation and what they see you do will be the dominant influence on their later behaviour. Show the child the right way of shopping so that a little money can be used to buy more things.
  
• Give an allowance - There's nothing like a fixed allowance to teach your children the finer points of budgeting. The allowance should be linked to some optional expenses such as sweets or books but it should not be linked to daily chores. To work out an amount that seems right for your family, sit with the child and work out a list of expenses and luxuries that will be part of the allowance. Then add a little extra so that your child feels good. Try and see that the allowance you choose for him is not significantly lower or higher than the allowance given to his friends or he may end up feeling either resentful or he may become arrogant. If his allowance is less and this is something that can't be avoided, sit down for that discussion and explain clearly that financially you and he cannot compete with his friend.
  
• Let children work part time - working is a wonderful way of enhancing responsibility and offering a preview into the adult world. But don't pay a child for doing his daily chores - those should be done because he is a member of the family. As incentive you can also teach a younger child that you'll help him by putting in the same amount of money that he manages to earn. This way if he puts in fifty rupees, you match the savings with another fifty rupees. You can also use this as a way to explain the provident fund concept.
  
• Buy him a piggy bank - this basic toy helps teach children the meaning of savings and investment. Make some amount of savings compulsory.
  
• Let the child suffer the consequences of his own mistakes - if he's spent all his allowance on luxuries, don't rescue him immediately. But you can help him to earn the extra money if he so chooses or take a loan from you.
  
• Don't be inflexible - children learn from mistakes its true, but they must also have the comfort of knowing that their parents love them and are watching out for them. Also occasional treats if you can afford them won't spoil the child but in fact will make him feel more loved. Follow your own instincts because ultimately only you know your child well enough to see what's right for him.

Learning to deal with money properly teaches self respect, good working habits and discipline. Also children who learn how to handle money have an edge over most everyone else because there are a great many adults out there who haven't the faintest notion of handling their personal finances. This is especially important for your daughters - too often we tend to believe that they need not know about handling personal finances because their fathers or husbands can look after such things. Sometimes, this could prove to be a dangerous oversight. So make money matters simple for your children because as we all know, money matters!