“I’ve seen children at young ages save for things they want to buy,” says Linda Leitz, founder of Pinnacle Financial Concepts in Colorado Springs, Colo. and author of The Ultimate Parenting Map to Money Smart Kids. “Parents should support the effort to save and friends will applaud it. Children often tell their friends, ‘Be careful with this – I saved hard to pay for it.’”

When teaching children about money, parents often overlook an obvious point: Your example in financial matters year after year is the key to your child’s success.

A solid foundation in money management doesn’t guarantee an end to teenage spending binges or financial follies as an undergraduate, but it probably means your student will make manageable mistakes that can teach valuable lessons. As an adult, your child will know how to avoid overspending and crushing credit card debt. Judging from the nation’s negative savings rate, that will make your son or daughter a personal finance guru.

Remember: Teaching your kids about money will take years. It’s important to leave room for your child to make mistakes along the way to adulthood. The key is not to bail your kid out, or if you must intervene to keep the household wheels turning, make sure your up-and-comer pays you back in full. If your child is old enough to calculate an interest charge – and therefore understand its impact – definitely add a market rate fee to the amount of the advance.

If you provide a clothing allowance for your child and yowls one Monday morning alert the cosmos to an acute shortage of presentable jeans, point out your kid’s mistake in over-spending on that team jacket or designer purse. Then remind your student that duct tape cures all ills.

Neglecting the basics is a mistake many kids will make as they learn to handle money. It’s also a manageable mistake, so let them live with it.

Take the time to underscore the importance of charity. This can’t be imposed from above or it will be seen as just another annoyance like sales tax or the government’s take on each gallon of gas. If so, you can bet charitable giving will evaporate as soon as your child becomes independent. Your child will follow your example at church, civic group, park preservation organization – you name it. Initially, it doesn’t matter how much and to whom your child donates – as long as some money is set aside for others.

The toughest thing for many parents to realize is that your spending priorities may not be your kid’s spending priorities. You think your son or daughter should buy nerdy stuff. Instead, the kid buys skateboard gear or clothes that, to your eye, are too saucy for school. It’s important to let children follow their passions – within budget and family guidelines, of course. Your child will soon learn that extra spending on trivial things limits the money available for other items, a lesson many adults have yet to master.

The goal: To give your child a stake in spending money wisely. Understanding the wise use of money will build confidence and provide lifetime rewards. All your kid’s quest for financial understanding requires from you is patience, firmness, wisdom and a willingness over the years to let your child make obvious mistakes and live with the consequences. In short, being a parent.