Ages 11-13
The Lesson: The sooner you save, the faster your money can grow from compound interest.

At this age, you can shift from the idea of saving for short-term goals to long-term goals. Introduce the concept of compound interest, when you earn interest both on your savings as well as on past interest from your savings.

Compound interest is said to be the 8th wonder of the world because of the way it makes wealth to grow. I am aware many adults find it difficult to turn both capital and interest over for a long period of time and as such building wealth is very difficult for them. Allow your child to learn this art early enough and he or she will grow with it. Financial freedom can only become a reality when money begins to work for them. Let them learn the art of making money a servant now instead of serving it.

Ages 14-18
The Lesson: When comparing colleges, be sure to consider how much each school would cost.

Search for the “net price calculator” on college websites to see how much each costs when including other expenses besides tuition. But don’t let the price tag discourage your child. Explain how much more college grads earn than people without college degrees, making it a worthwhile investment.

This in essence is helping your child understand why he or she needs to take that degree instead of learning a trade or doing something else and also beginning with the end in mind. This will go a long way to ensure that he or she is focused on the goal and ensures that it is achieved. It will also make it worthwhile because he or she counted the cost first.

Ages 18+
The Lesson: You should use a credit card only if you can pay the balance off in full each month.

It is all too easy to slide into credit card debt, which could give your child the burden of paying off credit card debt at the same time as student loans. Plus, it could affect his or her credit history, which could make it difficult to, say, buy a car or a home, or even to get a job. Sometimes, prospective employers check credit.

“The average household owes $7,084 in credit card debt. To reverse the trend of spending beyond our means and racking up hundreds of dollars a year in interest, it’s critical that parents teach their kids how to use credit cards responsibly (or better yet—not at all!—unless they can pay the total bill every month),” says Kobliner.

Although the above is what is obtainable in the US, we in Africa are also becoming used to buying things on credit. People now pay their rent, children’s school fees, buy cars, laptops, phones, etc on credit. These bills are bills that should be paid from our regular earnings or else it means one is spending one’s tomorrow today. Let your child know that before he takes that credit, he needs to confirm that it is not a liability that will make him sink into more and more debt. Let him know that it only makes sense to borrow to buy an asset that will bring money and not a liability that will keep taking money away from him. Living this as a parent is also very important.

Adapted from: http://www.forbes.com/sites/laurashin/2013/10/15/the-5-most-important-money-lessons-to-teach-your-kids/