Research shows that our attitude to money stems from that of our parents. Did they save for the things they needed or buy products on credit? Did they make do and mend or dispose of items?

Adult spending habits are formed at the age of just seven. So in a world of invisible money where purchases are made by card or online, how can we teach our children the real value of cash, budgeting and saving to avoid the next generation getting into debt?

Children are taught the ‘theory’ of money at school but it is up to us as parents and grandparents to put this into practice. We can work with our children to give them independence and confidence with money to prepare them for later life.

We start with ‘Wants and Needs’. That same old debate which is key when teaching the value of goods. Establishing the difference at an early age makes for sensible spending and a good foundation for all financial decisions.

Shopping lists – ask your child to help you compile the shopping list for your food shop. Again working out what you ‘need’ will help them prioritise spending. When shopping you could discuss the prices of products with them and explain how you could get the same product cheaper elsewhere.

Track their savings – Does your child have a savings account or a piggy bank? Set goals for them, track the money both in its physical form and also on a chart so they can see how much they need to buy that item they are saving for.

Compare spending – A day trip to the local attraction costs the same as….

Do your children know the cost of days out and experiences vs tangible products?

Spending money doesn’t always result in walking away with an object and that is an important lesson to learn when often even money isn’t tangible in today’s world.

Cash! – No it’s not always convenient but try to draw cash to pay for groceries etc every so often.

Talk about the cash and denominations when you draw it and also encourage your child to hand it over to pay in the supermarket/post office etc.

Holding physical money will give them a good foundation to get their heads around digital money.

Earning money – Explain what your wages pay for and why you have to go to work and in later years your child may be earning their own money which opens up a new realm of conversation.

As children grow older you will no doubt need to change tack and it is in the late teenage years that unfortunately the reality of debt can become very real.

Teach credit – It always amazes me how many people even in their early 20s do not seem to have the concept of credit. It goes without saying that explaining the implications of accruing interest and settling balances is invaluable. Many young people will not realise the implications that their spending will have on their future with regards to credit scores etc.

Mobile phones – They are the key to their social lives, use them to teach!

Make sure they know how to find out how much credit they have left or how much data they have used. This is probably the most appropriate example of non tangible spending and one that most will certainly relate to.

Talk about money – Is money really the taboo subject it once was? Does it need to be? Talk to your teenagers about money. Being open and honest is surely the best way to encourage your children to work with their money.

In an ever-changing world, these foundations are invaluable.