"Money is a language like any other," says Kim Deep. "The earlier you start, the easier it is to learn."

It’s a lesson she wishes she’d learned as a child.

As a young woman, the Edmonton accountant and mother had trouble living within her means. "My dad always wrestled with debt, and I found as I grew up that I’d make money easily and spend it very easily."

Determined to give her three kids a better financial start, she developed an elaborate system. Each child has six bank accounts in their name, ranging from long-term savings and investments to everyday needs, and they control two of them: One for necessities and one for play. She divides their allowances among the accounts and the older kids also deposit their own earnings into them. Each has a debit card and can bank online, and Deep reviews their spending each month.

ALLOWANCES

• A common rule of thumb for setting allowance is giving 50¢ to $1 per year of age. That means a seven-year-old would receive $3.50 to $7 a week.
• A Decima poll of 650 Canadian parents found that the most common weekly allowance for kids aged seven to 13 is $5.
• David McCurrach, author of several books about money for kids, advises parents to figure out how much they already spend on the non-essential purchases that children beg you for and turn that into a set allowance, then list all the items they will now have to buy for themselves.

Putting the children in charge of their own money teaches them the difference between wants and needs, says Deep.

"If [my older daughter] spends all the money in her necessities account and then needs a haircut, she has to come up with a plan. I don’t have the kids nagging me."

Even her youngest, who is 5, often decides to forgo a treat when she realizes it will cut into her savings. What’s more, managing money has improved her math skills: She’s already a whiz at adding and subtracting.

Parents are increasingly hearing about the importance of teaching kids about money from books, teachers and financial institutions keen to groom the next generation of customers. Children and young adults today have more spending power than ever, accounting for $40-billion worth of purchases in North America. According to the Vanier Institute of the Family, 45 per cent of high school students earn an income, and around 40 per cent of Canadian parents give their kids an allowance.

That’s a lot of cash in inexperienced hands, and experts agree that a solid grounding in how to earn, save and invest money is kids’ best defence against the onslaught of advertising.

"While schools and parents focus on other priorities, advertisers are shaping kids’ attitudes towards money almost from birth," says David McCurrach, who runs the website KidsMoney.org and has written several money-related books for kids.

"The only chance children have to avoid financial problems as young adults is to develop good habits while they are growing up," he writes on the site. "To do this, they must be given responsibility for at least a portion of their own expenditures and be able to learn from their own financial successes and mistakes. They must become stakeholders."

Ruth Berry, a professor of family social sciences at the University of Manitoba, says that children pick up their first and often most lasting ideas about money at the dinner table, when talk turns to saving for vacations and other family finance subjects.

"Specifics should be left out, but general messages, such as that you can’t have everything all the time, give kids a grounding,” she says.

Research has shown that middle-class kids who learn financial basics early tend to be more successful as adults, she adds, because they’re more likely to avoid pitfalls such as overspending on credit.

One of the biggest benefits of letting kids manage their own money is that it tames their pester power. One mom of a seven-year-old boy, who receives $7 a week, reports, "He’s a joy to take into any store because when he asks for something, I just say, ‘Sure, you have your money!’ You’d be surprised how often he decides he doesn’t really want it after all!"

She’s also noticed that he takes better care of the things he buys himself.

While more than two-thirds of Canadian parents tie allowance to work, there is a philosophical split between those who believe money should be a reward for good behaviour or doing chores and others who view allowance as simply a teaching tool.

Each position is passionately defended on AllowanceMagic.com, a website devoted to kids and money. But even the "child labour" advocates draw a distinction between paying kids to perform tasks for which parents might otherwise hire an adult, such as shoveling snow, and for merely chipping in around the house or getting good grades.

"Children should have responsibilities in the home as members of the family," writes one parent. "Paying children to do chores sets kids up to start thinking in terms of doing only what they will be paid to do."

Financial institutions are realizing that parents need help guiding their kids through money issues and, not entirely altruistically, are offering a growing range of tools. Scotiabank’s "Getting There Savings Program for Youth," for example, is a no-fee, no-interest savings account that gives those 18 and younger 20 debit transactions a month, online access to their accounts and prize draws. CIBC, which has an account for kids that pays interest, has a family section on its website explaining basic financial concepts and featuring money-themed games for kids.

Parents can also turn to services like Active Allowance, a website that helps parents plan their children’s responsibilities within the household, and creates a "virtual family bank account" that families can use to craft a budget for kids’ allowance spending.

In an ideal world, parents would serve as role models for their kids in prudent money management. In reality, many adults are lousy at running their financial affairs.

During her 20 years as an accounting practitioner and teacher, Edmonton’s Deep saw lots of parents with money problems, and realized no one was teaching the kids how to avoid the same traps. So a couple of years ago she started Kidz Make Cents, which runs a "money camp" for kids.

"We all have relationships with money, and some aren’t very healthy," she notes. "But if you don’t teach kids the basic skills, like the ability to delay purchases and the whole concept of credit, it’s something that could cause them a life of misery."

The author is a Toronto-based freelance writer.

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