The responsibility for teaching children lies with their parents. What lessons are we teaching them about money? Do they understand the connection between work and money? Do they know that it costs a lot of money to live? That expenses have to be paid before "fun" can be purchased? Do they realize that even grownups can’t have everything they want? Do they understand that with a little planning, some hard work and a lot of patience, they can have what they need and often what they want?

Have you had the money talk with your child? Is it time?

Parents want their children to be independent, happy and productive adults. Sometimes we overindulge our children believing that we should provide them with all we can so that they will be "happy". Usually this way of thinking creates spoiled, unhappy adults who expect the world to cater to them and who believe that they deserve everything they want. Not a happy picture. We have plenty children (of the rich and famous) to look to for proof of that.

Part of being a well-rounded adult is learning to be financially responsible. Here are seven "life lessons" that we believe your children need to learn in their early years. We’ve included the theoretical principle and its practical application:

Principle: If children want money (things), they need to work to get it (them).
Application: We have an economic system in this country that requires its citizens to work for a living. Teach children that they can "earn" things by working. Help them to find satisfaction in doing a job well.

Principle: Work is good.
Application: As members of a family we all need to share in household duties and do our part to look after our own needs. Some of this "work" will receive a monetary compensation; much of it won't. Let children start to contribute at an early age.

Principle: It's okay to dream but very important to know what they need and not just what they want.
Application: It's important to set goals and then to plan and follow a budget. Show your children how this is done. Include them in family discussions and work with them individually.

Principle: Children can't have everything.
Application: Our world is full of wonderful, desirable things. Teach children to prioritize and to pursue things that are worthwhile. They should work for things that are important to them, not necessarily what advertisers tell them should be important to them.

Principle: If they haven't paid for it, it's not really theirs.
Application: Help children understand compound interest as it works for them (savings and investments) and against them (credit and debt).

Principle: Things do NOT = happiness.
Application: Help your children find joy in relationships and friendships. Provide ways for them to develop physically, emotionally, intellectually, spiritually and socially. Encourage the pursuit of worthwhile activities and help them to develop their talents and pursue their interests. Let them know that "things" do not bring joy or satisfaction.

Principle: It's not all about them.
Application: We are just a small part of a very big world. We need to be aware of those around us and be willing to lend a hand to those who are in need. Give your children opportunities to give of themselves and to serve others and you will give them the key to a happy life.

"Every father should remember that one day his son will follow his example instead of his advice."

You are your child’s first and best teacher. If you lead by example and teach your children how to earn, spend, save and share their money, they will be happy, productive, successful independent adults.

P.S. The sixth chapter of our personal finance book: Power Spending: Getting More For Less, is about Teaching Children. There are four sections: Lead the children, Teach the children, Guide the children and Educate the children. We believe that financial education needs to be taught at home. Parents should set an example for their children and help them to be fiscally responsible when they leave the home. Education is a huge factor in their financial success and parents should do all they can to encourage their children to learn a trade or profession.