We've all heard the horror stories about kids who don't seem to know the meaning of a dollar or understand the value of work. They're the ones who rack up thousands of dollars in credit card debt their first couple of years at college (not on books, mind you, but on pizza, beer and not-so-sensible shoes). They're the ones who end up back on your couch at age 25. And they're the ones who—because, after all, you're their parent—you reach into the retirement account time after time to bail out, all the while telling yourself you'll never do it again.

It doesn't have to be that way.

Although some interesting new research has shown that there is an innate component to a child's money proclivities—it goes a long way to explaining why one of your children spends every penny that passes through his or her fingers while the other can't bear to part with a buck—a great deal has to do with what you teach them. This sort of education, you'll be happy to hear, has far less to do with demonstrating how to read the stock pages than it does with how to make good choices. In other words, raising money smart kids is all about being a good parent rather than being, say, Warren Buffett.

First things first: Are you spoiling your kids?

As an adult, there's one thing you know for sure about money—it's a limited resource. And yet, that's a message we have a tremendously hard time passing along to our kids. Many of us—often because we feel parental guilt for hours working (or playing) outside the home, away from them—give our kids most of the things they ask for, despite the fact that we may not be able to afford them.

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