Talk about the trade-offs, for example, in renting three movies a week as opposed to one or in buying a new pair of running shoes now or waiting for a sale. Help them think about things that might be coming up that they may want to plan for, such as a friend's birthday. Suggest that they consider a cushion for the unexpected, such as an invitation from a friend's family to go to an amusement park. Include children on shopping trips to teach them smart shopping techniques and what things cost. Let them compare product quality, price, return policy, warranties.
Children learn through example.
Let them know how you save and invest and include them in conversations about budgeting. Some parents wonder whether they should loan their children money. It runs counter to the notion of planning. But on occasion, you may want to help your child with a purchase. When the bicycle our son wanted was offered at a reduced price, we loaned him the money that he had not yet saved so he could take advantage of the sale.