Child psychology - by Melanie Barwick, Ph.D., C.Psych.

When you think of your kids and money, what's the first thing that comes to mind? Okay, yes, they are expensive. What's the second thing? Perhaps your mind turns to allowance and, by extension, how kids learn to earn money, spend it and save it. If your children are older, you may be thinking about how they will eventually earn it when they join the workforce.

Money concepts begin to develop when a certain level of cognitive readiness paves the way for numeracy, learning how to count and recognize denominations of money. As soon as kids are old enough to consciously observe their parents' spending habits, they begin to form similar impressions of the value of money. Essentially, what kids need to learn about saving money, making it grow and spending it wisely begins at home.