A recent survey from Barclays found that increasing numbers of young people in the UK have difficulty in managing their money. Over a third of respondents aged between 16 and 24 said that they regularly ran out of money. Meanwhile, others didn’t understand how credit cards and current accounts worked.

So, if you’re looking to make your child more ‘money smart’, here are five tips to help you.

Help them open a bank account

There are lots of young persons’ current accounts on the market and opening a basic bank account is a good way to teach kids how to manage their finances. Children from the age of around 10 can generally open a bank account.

Shop around for the best current accounts for teenagers and you’ll find that many offer credit interest, a cash card for withdrawing money at an ATM and no monthly fees. You may have to provide your consent if you want your teenager to benefit from an electronic debit card.

Stress the importance of saving versus spending

Teaching children to save is an important part of their financial education. Understanding that they have to put money away in order to buy a more expensive item will teach them the benefit of keeping money in their savings or bank accounts until they have enough to pay for an item.

It’s also important that you make saving fun. Many banks and building societies offer accounts aimed specifically at children which try and make saving interesting. Buy a ‘fun’ money box which encourages kids to save their coins and then help them pay their money into the account regularly so they get used to seeing their savings build up.

Alternatively, you could consider paying them interest for money that they save at home. They will learn to understand how compound interest works and how quickly their savings can build up.

Give them an allowance in a way that promotes saving

Whatever pocket money or allowance you give your children, it often helps to give them the money in denominations that encourages saving. For example, if you give them £5 every week, give them five pound coins rather than a five pound note. This should encourage them to put one or two coins away for saving while keeping the rest as their spending money.

Charge interest on loans

If your children do come to you for a ‘loan’ or an advance on their allowance, why not consider charging them interest? Even a small amount of interest will help teach them how borrowing works, providing them with a useful lesson about the workings of credit cards and loans.

Help them set goals

By setting savings goals for your children you can help them become responsible for themselves. If they want a new gadget, toy or video game, you can help them to set a savings goal. By saving over a number of weeks you could even reward them with a ‘bonus’ if they reach their savings target.