As children receive money from birthday parties, allowances, jobs, or any other ventures, it is important that parents teach their children how to manage their money. Often times, children are left to do what they would like with the money. As a result, many children spend all of it.
This type of behavior has become so common that many people don't look at it as a problem because their child is young, but the truth is if the mentality is not corrected early this habit can follow children as an adult. That is why it is important for parents to step in and correct this type of behavior. Parents should help children learn how to diversify their money and not spend all of it just because they have it. There should be a healthy balance between spending vs saving.
Parents should set the pace for children to follow when it comes to saving. Financial parents understand that it is their responsibility to help their children properly plan for their future. In the book, Financial Parenthood, parents learn what types of accounts they should be opening for their children to help them diversify their money while they are young. As a result of teaching their children how to save early, they are better equipped to take control of their future as an adult.