Neither my wife or I have ever been financial geniuses. We’ve both learned about personal finance from the school of hard knocks and decided shortly after we had our first child that we wanted to pass down what little money management experience we have. We started with our oldest boy when he was old enough to recognize and want toys (about age 2) and started teaching him by example. The following is a short list of the financial principles we have adopted and have made part of our daily lives:

1) If you want to have money don’t spend money. We learned very early in our marriage that you have to monitor and watch your discretionary spending. We established right form the start that our kids were not going to get everything they wanted and when they wanted it. We buy our kids very few toys on a regular basis and they receive the vast majority on birthdays or Christmas.

2) Never impulse buy and always wait 24 hours before making a major purchase. The rule in our family is that nothing over $40 is purchased on a whim unless it is an already budgeted item. Chances are if you wait 24 hours that item you couldn’t live without yesterday is a distant memory today. I can’t tell you how many trips we make to Sam’s Club, Best Buy, etc. and never purchase a thing.

3) Bargain shop whenever you can. You have to be careful with this not to over do it. I remember one Sunday after church when we were looking for a place to eat and my wife proposed a restaurant. My son promptly asked me, “Do you have a coupon for that? If you don’t we can’t eat there!” A tear formed at the corner of my eye and it couldn’t have been a prouder moment for me. However, I also realized that I needed to temper our voracious bargain hunting with some reality and assure our child that it was OK to eat somewhere if you don’t have a coupon.

4) Avoid buying things on credit. Ha! Easier said than done but this rule and rule #2 above go hand-in-hand nicely.

5) Save for big purchases. For nearly the past two years my son has opted to put his weekly allowance into the “Bank of Dad” and has built up a nice sum that he can now spend on something bigger. We’ve always given him the option of what he wants to do with his money and he asks me about once a month what his balance his. To date he hasn’t pulled any money out.

6) Be nice to yourself. This is absolutely the most important rule. Once you have established a habit of following the previous 5 rules it’s very easy to become a shrewd miser and it becomes an obsession to spend as little as you can and save as much as you can. However, you also need to recognize that there are things that you and your loved ones want and need for emotional or social reasons if not for an actual need. Budget these things in whenever you can and don’t be afraid to splurge on a rare occasion. The idea is to make the splurging something special so that Venti Latte at Starbucks becomes a memorable experience rather than just your morning cup of coffee.

That’s our basic approach to teaching money management skills to our children. I’m there are a lot of other really good ideas out there so be sure to read about them at the Parent Bloggers Network. Another really useful tool is the Moneywi$e eLearning tool provided by Capital One and Consumer Advocacy so please check it out!