When Xavier was a baby, we opened savings accounts for both he and Gabriel. At the time, Gabriel had almost $200 saved up. Any time he received money for anything, he immediately stuck it in his bank and thought nothing of it.
However, when he was 4, Gabriel started getting a serious case of the 'wants.' Every time we went to the store, he wanted everything, and would spend much of our time at the store begging for various toys. Don't get me wrong. He wasn't obnoxious. He was just annoying. We decided it was time for money to have meaning and told him we would no longer be buying things for him except on gift giving occasions. If he wanted to buy something at the store, he had to bring his money and buy it himself.
Gabriel quickly learned the value of money. He also learned the concept of saving part of his money and spending part of it. To this day, Gabriel assiduously saves his money. He almost always has money to spend. He saved for almost a year to buy himself an iPod touch. And, because he paid for it, he takes extreme care with it. He has also discovered the value of buying second hand. He almost refuses to buy a new book. He much prefers to buy books at our local used book store. He will, however, buy new books from authors he loves. He's just very picky about them.
Xavier is not as careful with his money. He likes to spend money on Tic Tacs. However, we quickly put into place a savings plan for him. So, each time he gets money, he puts half of it in his 'save' envelope and the other half in his wallet. (We do not tell our children how much to give; instead we encourage them to see what is needed around them and give as they can. They have all proven to be very generous with their money, so I think this is a good policy for us.)
Xavier recently decided that he wanted to buy himself a Nintendo DS. I found it amusing, and wonderful, the way he compared prices between the versions and what they could do. He finally settled for the oldest style because it was cheapest, and he could find it used very easily, leaving more money to buy new games. It also takes Gameboy games, so he could use the games he already had. I was proud of this analysis. He still has a lot to learn, but he's enjoying buying things for himself. It really makes them proud.
Dominic, well... Dominic is the baby of the family. I am finding that no matter how much I try, I can't seem to keep the stereotypical birth order things from happening. He spends money like water. While the other two have blown money, Dominic has gone into debt to his brother to buy things. Gabriel could start quite the scam business at our house, between me having to borrow cash from him and Dominic just flat out borrowing money.
After having to give Gabriel a portion of his allowance ever payday for two months, Dominic has gotten on the debt free bandwagon. In fact, he has decided that saving for things is a good idea. he's been very assiduous about saving his money. The only problem is that he wants everything. He especially wants Legos. For about a year, he had pictures cut out from a Lego catalog and taped to his wall. Any time he would get enough money saved up for one of the items, he would bring me the cut out and his money and request that I place an order on Lego.com.
Fortunately, Dominic has recently discovered the idea of his money earning interest. He has had a bank account since he was a baby, but it has always been long distance. He has never had a local bank account. So, when I opened a local account for myself, he asked if he could have one, too. I took him to the bank, and he deposited all the money he had saved.
He is thrilled. Now, he is more willing to save his money. He loves the idea that the bank is borrowing his money and he'll make money from that. I love his enthusiasm and I hope he will always have a good money ethic.