Struggling financially can be very painful whether you are a child wishing for enough money to purchase a new toy or an adult with greater financial responsibility. Understanding the basic principles of family finances can help overcome such pain and frustration, so it is key to teach others the primary principles laid out in #1-4.
Children can especially be taught at a young age how to be responsible for their own money. As they grow and gain more responsibility, they will also gain more money and need to know how to handle it in a way that they don't regret. As children learn to work, they will also learn the value of the rewards that come from the effort put forth. An incentive for children to save their money rather than spending it all is found in helping them understand how their money grows by earning interest. Parents may even consider an additional incentive by matching a percentage of what the child sets aside for savings similar to an employer 401(k) match. This requires some sacrifice by the child (saving money rather than spending it) for a greater good (to build greater wealth in the future). This way, parents have something to reward the child for (setting aside savings) rather than giving out an allowance for nothing.
As you help your children and others around you become more financially responsible, you may actually find it easier to be more financially responsible yourself. That, in the end, will lead to a strong financial foundation.
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