Parents share a lot of things with their children in the hope that the information will help them grow into successful adults. But there is one topic most parents sometimes avoid talking about. For many parents, the idea of having the "money talk" with their kids is a terrifying thought. The biggest reason parents avoid the topic is they don't believe they know enough about money themselves and fear they will give their children the wrong information.

Although discussing the topic of money with your kids can be uncomfortable, it is a necessary step in their development. Few schools teach courses on how to handle money the right way. Without learning money management skills at home, your kids are going to be in for a few nasty surprises when they get older. 

Are you worried about your children's money skills? Start with the following four tips for teaching financial literacy to your kids. 

1. Let Kids Experiment

One effective way to help kids learn how to make budgets is to give them a chance to make mistakes on their own. A small allowance in exchange for additional household chores is the perfect incentive for children to learn how to budget. Do they want to blow this week's money on candy and a cheap toy or save up a few weeks to get something they really want? Of course, some children will still be impulsive and want to spend their funds right away, but better they learn to make mistakes with $10 than $10,000.

2. Include Children in Household Spending Plans

Do you have a shopping or entertainment budget each month? Try including an older child in financially planning for the next month. Kids learn quickly when they have to stay home bored for two weeks because they blew the entertainment fund during the first half of the month. Another great idea is to set a grocery budget for an upcoming trip, make your week's list and meal plan, and then take your child to the grocery store with you. As you place items in your cart, have your child add up the cost of each item until you hit your limit. You can even cost compare various name brands versus generics and calculate your savings. This is another great exercise in making choices based on limited funds. 

3. Gamify

Turn budgeting and saving money into a game. Give your shopping lists to your younger kids and let them search online or in the newspaper for coupons and sales. Maybe you could promise to put a percentage of the money they save into a bank account for them to purchase something special down the road. You could even encourage older children to learn lifelong investment skills by participating in a stock trading simulator such as The Stock Market Game, or match their contributions to a savings or investment account up to a certain amount each month, when they receive allowances for completing chores, for example.

4. Make Them Earn It

Knowing how to save, invest, and spend money is important, but one of the best things you can do for your children is to instill a good work ethic in them by letting them earn money on their own. Whether your teen works part-time at the movie theater or you help your little ones start a lemonade stand, the willingness to work hard and be rewarded is one of the best financial lessons you can pass on to them. 

These tips are only the start. Use the opportunity of teaching your kids about financial literacy to learn more about it yourself!