Martin Hawes: Teach your kids to be financial planners

We all want our children to be financially literate. Yes, personal finance should be taught in schools, but what is learned about money at school will be less significant than what is learned at home.

So what should you be doing with your money that your children should be learning?

The first thing is to live within your means. This may mean having to say "no". No one can have everything, and you need to show your children that you prioritise the things you need.

Perhaps the worst behaviour you can show is a lack of control; that you live hand-to-mouth.

The second thing you should do is to invest. Your children should see you making financial investments as well as investments in health, education, career and your family. Your children need to see that good investments give a return that makes the sacrifice worthwhile.

The third important behaviour is to borrow only for the right things. If you show your children that indiscriminate use of a credit card or hire purchase is normal, that is what they will learn.

Your children need to know that debt is dangerous and that while borrowing for a house or to build a business is good, borrowing for consumption is just dumb. Children are impervious to what you say if it does not align with what you do. Manage your money and you'll set them up for life.

* Martin Hawes is a financial adviser. His disclosure document can be found at www.martinhawes.com.