Remember all those great lessons your folks taught you about money?  Yeh? Nah?  Turns out not many do.

So, how can you set a good example for your children with just a few simple changes?

As a parent, you want to ensure that your children have the skills to make smart financial decisions. Tell them about the importance of saving or the power of compound interest. But did you know that you could be sending them negative money messages without meaning to?

Here are four common ways you could teach your children healthy money habits.

1. Reveal magic behind digital money

Your children have likely seen you pay for hundreds of transactions without glimpsing cash changing hands. For small children, it can seem like money problems are solved with magic – just wave or tap a plastic card. These days, we don’t often need to head to ‘ze bank in ze wall’ either.  This makes it important to discuss the value of money with them. A good way to start is to explain how your earnings get deposited into your bank account and how you use this account to pay bills. For older children, consider showing them how taxes are deducted from your salary and where your superannuation goes.

2. Spend wisely

Frequently buying things on an impulse could send the message that it’s fine to spend without planning or consequences. Sticking to a budget is key to avoiding impulse-buying. To set an effective budget, consider working with a professional financial adviser or money coach. Your adviser can develop a budget that factors in your income, expenses and financial obligations.

3. Teach independence

It’s convenient to do everything for our children. Much quicker right?  And there’s so many other things to get done!  But by giving them a chance to have their own money and decide how and where to spend it, they could learn powerful lessons about budgeting. Even include options for charity giving or philanthropy if this is important to you.  For adult children, always offering them financial help can create a cycle of dependency. Letting them make their own money decisions could help them develop financial responsibility, and even the ability to learn from their mistakes.

4. Include them in budgeting

Many parents keep household financial planning and budgeting to themselves. While you don’t have to fully involve your children in managing your family finances, giving them a role to play, such as getting them to do grocery shopping using a set budget, can teach them lessons about money. If your children are old enough to earn some income, why not help them set their own long-term financial goal?  Help them set goals and work out what to put towards it.  Learning to ‘live within our means’ is a priceless lesson to teach.

Use your influence positively

You can strongly influence your children in relation to money, so it’s important to pass on smart money management skills. If you don’t know where to start, consider reaching out to your financial adviser to help you stay on top of your finances through proper planning and budgeting.  Or if you’d like to do some of your own reading, ASIC’s MoneySmart website is a great resource too.