Although personal finance is not always taught in schools, it is an important skill to learn. Starting early can teach children to not only make smart financial decisions, but also begin planning for their futures.
Some lessons to learn are outlined in this article: How You Can Teach Your Children The Value of Money (merrilledge.com). A couple of their key points are that money must be earned and that saving is important for reaching goals. I love their idea of having a piggy bank or savings jar where parents can reward their kids' savings with a small amount of "interest."
Another article, Teaching the Value of Money | Parents, also details more ways to teach kids about money. I like that they want the kids to choose between items and make their own decisions, such as choosing between ice cream or a hardcover book. I think that this is a great way to teach the concept of saving because it allows them to think about whether or not they want to buy a cheaper item instantly, or wait to save up for a more expensive item.
Although credit cards tend to be more convenient, using cash is a great way to learn how to handle money. Seeing physical cash helps to realize how much money you actually have and can prevent overspending. However, if you are using a piggy bank, it may be difficult to tell how much money is in there. This is why it is also useful to track earning and spending habits in a journal or a budget. At a younger age, this could be tracking how much money you earn from allowance (or gifts) and writing down what you spend your money on. However, be sure to keep this journal or list in a safe place, where other people cannot access it.
If you want to read more interesting articles on teaching the value of money, check out these links:
Teaching kids about money - Moneysmart.gov.au - Has activities for children ages 5-18