Byline: HELEN MONKS
WHILE the average 12-year-old will know about the birds and the bees, they are less likely to know the financial facts of life.
Personal debt is set to become an epidemic for future generations as credit becomes easier to obtain and temptation harder to resist.
The best way to avoid getting into money trouble in later life is education.
The bad news for mum and dad is that it's down to you. The good news is that talking to your kids about money should be less embarrassing that the "where babies come from" chat.
The National Curriculum offers cash coaching through Personal Social and Health Education (PSHE) and Citizenship classes. However, your child could be as old as 14 before they get this guidance and by then they may already have developed bad habits. Here we break down 10 things every child should be told about money before they are 12.
1. Know the family finances: "Financial habits are ingrained at a very early age," says Ann-Marie Blake, of NatWest, which runs educational programme Face2face with Finance.
Involve your child in family budgeting, planning and saving, so as to help them realise why they can't always have the latest trainers and develop a sense of what decisions need to be made.
2. "Money doesn't grow on trees and you have to work to earn it": so says Peter Eldrid, deputy chief executive of charity Parentline Plus. It's obvious, but the sooner your child accepts that work is the main source of money, the better. Try rewarding your child with pocket money in exchange for completing household chores.
3. How to budget: help your child to write a personal budget, including bus, lunch and pocket money, and keeping records of what they spend.
Encourage them to start the saving habit early.
4. Not budgeting can have unpleasant consequences: resist the temptation to bail your child out if they don't save enough for what they want. When you can't afford something because you didn't save enough, tell your child.
5. How to use a cash machine: some children's bank accounts provide holein-the-wall access to their cash, such as Yorkshire Bank's Cybersave account (www.yorkshirebank.co.uk). Teach them how to do this safely.
6. Asking questions about money makes them clever, not stupid: encourage them to be questioning, whether it's about being asked to lend cash to friends or why something costs so much.
7. The difference between debit, credit and prepayment: make your child clear on the differences early.
8. Borrowed money is not free money: save your child from the debt trap - if you lend them money, write out a Bank of Dad or Mum credit note and note the debt until it is paid off.
9. You have a choice on what to spend your money: tell them that shopping around can save money on CDs and clothes, making them more likely to get the best deals later in life.