Red flag: Your kid seems to make a lot of rash, even stupid, decisions.
This could mean: You can envision your future adult son or daughter buying a very expensive car that they can get a loan for but can't really afford—and then hitting you up for money.
Possible solution: Michael Goodman, a financial planner in New York City who serves on the American Institute of Certified Public Accountants' National Financial Literacy Commission, used to do something pretty ingenious when his own two young kids were younger.
"We kept track of all the money they get throughout the year, including birthday and holiday money," Goodman says. "We'd also keep track of how they spent that money. And then at the end of the year, we'd add it all up, and we were always surprised at how much money they had, and we'd look at what they bought, and we'd discuss whether it was a good purchase or not. Like, did I enjoy that computer game?"
Not only was it educational for his kids, says Goodman, it has been educational for him. He has a pretty good sense of his children's money personalities and their financial strengths and weaknesses.
The theme: Just talk to your kids. Yes, there's a pattern emerging in all three of these scenarios. Any reputable personal-finance expert will tell you that the best way to keep your children from someday making colossal financial errors as an adult is to openly discuss money issues with them.
But don't go overboard, says Rosen, who points out that if you force your children to save all of their money and never have any fun buying anything, you could end up giving them the financial adult-monster DNA you're trying so hard to avoid. In other words, if you don't allow them to have a little fun with their money, once your children have the freedom to buy whatever they want, whenever they want, they just may.