Did the kids rake in some cash this Christmas? If so, most likely it's sitting in a drawer or multiple change purses, drawing zero interest.

As we struggle with ways to teach our kids about today's struggling economy and why it is harder and harder to provide the "wants" that kids often beg for, perhaps we should look no farther than our own banking institutions. Children enjoy many firsts, such as their first bike, or their first pet and today, their first cell phone. Why not help them open their first savings account. As parents hoping to raise financially savvy kids, one of the best things we can do is expose them to banking at an early age. Savings accounts for children offer many great personal finance lessons such as the importance of saving money, the magic of compound interest and the basic mechanics of banking.

This alone could teach your child the value of a dollar and the importance of saving money. And all of those "wants" the kids have, can be purchased using their hard earned money. Most banking institutions have youth savings accounts which require just $5 to open and no service fees or minimum balance requirements.

These interest-bearing accounts are a great way to allow your child the opportunity to watch their money grow. Plus, the act of allowing your child to make a deposit themselves is important, psychologically.

Smart money habits start early. Teach your kids the value of saving.

Five bad habits to not teach your child

1. Impulse spending

A hard concept for children and some adults to understand is that we can't always buy what we want to. Impulse spending is the concept of buying something because it looks nice or might be used someday. Retailers around the world take advantage of this weakness by displaying certain items in storefronts or close to cash registers to appeal to shoppers' eyes and wallets.

Try giving children a certain amount of money to spend in a store or for a day. Remind your children that they will not be given more money and need to properly budget their money and not buy stuff just because it looks cool.

2. Not establishing an emergency fund

Due to situations a person cannot control it is necessary to have what is called an emergency fund. The emergency fund protects against medical bills, car repairs, job loss and unforeseen accidents. It is important to set aside money in this fund to cover expenses which are not in the budget.

An emergency fund should have up to six months of monthly wages to be able to cover living expenses if needed. Teach your children to set aside money each month to save for certain items such as a big toy or trip to an amusement park.

3. Using too many credit cards

Consumers often hold more than one credit card in their wallet. Beyond the common Visa or Mastercard are several store specific retail credit cards. Stores prey on consumers by offering them immediate discounts if they sign up for credit cards that day or offer rewards points similar to large credit card companies. Children will need to have the difference between using cash and credit cards explained to them.

4. Not having a budget

It is important to establish a budget so you know how much money can be spent each month. Creating a budget can be as simple as creating a sheet with all monthly expenditures including utility bills, car payments, mortgage and medical bills. If you help them create a budget on paper hopefully they can follow it and not have to learn the hard way when they run out of money.

5. Making late payments

Credit cards are likely to charge late payments if the bill is not paid on time. These costly penalties add up and can also hurt credit scores. Consider giving your child an allowance and charging them a penalty if they have to borrow more money. This will sort of act as a late payment for the next month. This will hopefully teach your children about budgeting and about how penalties hurt disposable income.

(Courtesy of www.childbankaccount.net).