Raising children can be a trying time for parents as they negotiate their loved ones through adulthood. One crucial lesson however that can shape their adult lives must be learned – financial responsibility. A bad money mistake can spell disaster for your child's future.
Consider this: The average young adult amasses $45,000 in debt by the time they turn 29, according to a recent commercial bank report.
"This generation of 20-somethings was raised during an economically-thriving period," says financial expert Mark Hansen, author of Success 101 for Teens and a former Palm Beach County elected school board member. "Undisciplined spending habits, student and car loans, and a tough job market have stymied their financial growth. Perhaps the worst culprit is financial ignorance, but we can count this as a lesson for future 20-somethings."
For young people, organizing finances can be intimidating to the point of prohibitive, says Hansen.
"We need to have a curriculum in schools, from kindergarten through 12th grade, that ensures our kids graduate with financial literacy," he says. "From balancing a checkbook to understanding what it means to pay – and earn – interest, kids need basic money management skills to survive in the world, and most aren't getting them."

Hansen says teens should know and practice the following:
Saving for dreams – the three-envelope method:
Hansen suggests a three-envelope system which helps your children establish goal-oriented saving habits. Envelope one is marked for day-to-day expenses such as gas or lunch money. Envelope two is for short-term goals, such as clothing or a new laptop. The third envelope is for long-term goals such as a car, college tuition or a "future millionaire club" fund.

Creating a budget:
A budget outlines clearly what is possible and not possible with the money available. To create a budget, first list all of your income, expenses and monthly expenses. Add up these amounts separately, and then tweak your budget so you can meet your expenses with money left over for savings. Be sure to also review your budget weekly.

Set and follow goals:
First, figure out what your current finances are, then determine what they will be in the future one year, two years and four years ahead. How will you get to your one- or two-year goal? You need a plan, which will usually involve earning more money, spending less, or a combination of the two. Finally, stick to your plan.

Understanding interest rates:
Interest is a fee paid for using someone else's money. Simple interest is straightforward: 5 percent accrued in your bank account with $100 yields $5 in interest at the end of the year. Compound interest, however, means ever-increasing amounts. This is crucial to understanding debt taken on from lenders. Know what you are borrowing, and on what terms. Just as money works for you in a bank account, money borrowed can work against you if not paid back in a timely manner.
Learn to balance a checkbook:
These days, it is easier than ever to review accounts online, which automatically tracks transactions. Banks however make mistakes. Be sure to track your accounts independently. Banks also place a premium on service and want to establish a positive relationship with young customers. If you have a question, speak to someone at the bank.