Like a fairy-tale curse, poor money skills can screw up your kids, their kids and their kids' kids.

Good money habits, on the other hand, can insulate kids from making major mistakes later in life and will positively impact their quality of life as adults.

To raise money-smart kids, parents should start at a young age and regularly reinforce money lessons as children grow up.

Unfortunately not all parents consciously try to foster money skills in their offspring. A recent survey by TrueCredit.com found that about 20 percent of parents, nearly one in five, had never spoken with their kids between the ages of 4 and 18 about money basics.

Unlike a birds-and-bees talk or don't-do-drugs speech, money skills must be taught to kids, experienced hands-on and consistently modeled by parents.

The alternative could cost kids a fortune -- literally!

Children must learn these four important lessons before they flee the nest to go to college or into the real world.

Learn how to budget

It is hoped you started your children's training early because the foundation of successful personal finance -- everything from mortgages to investing -- hinges on budgeting.  

Luckily, it's very easy to train little kids to budget. It has to start with money, and that means putting cash in kids' hands.

The best way to do that is with an allowance. According to Neale Godfrey, founder of the Children's Financial Network and author of "Money Doesn't Grow on Trees: A Parent's Guide to Raising Financially Responsible Children," allowances serve two purposes: They teach kids to work for money and they can be used to introduce -- and enforce -- good budgeting habits.

"I start when they are age 3, when they start saying, 'I want, I want,'" she says.

Godfrey recommends paying the child's age in dollars per week.

"So a 3-year-old gets $3 a week, a 10-year old gets $10," she says.

Some experts recommend half that amount, but it's really whatever parents feel comfortable with and then you can adjust as you go.

When teaching kids about money and budgeting, parents should implement a tiered system, with savings for charity, spending and long-term goals, say most experts.

Lori Mackey, author of "Money Mama and the Three Little Pigs" and founder of Prosperity4Kids, uses a 10-10-10-70 system for teaching kids to budget.

"When your child gets their first dollar, we suggest that you teach them to save 10 percent, invest 10 percent, give 10 percent and live from 70 percent. When you give them a dollar, you give them two quarters and five dimes and then you sit with them and say this dime is for something that is important to you or that you want to help," she says.

"And they will automatically tell you it's going to be animals or nature or maybe they have a family member that's gone through some type of an illness so you can help them understand what giving back means with 10 cents out of a dollar," says Mackey.

Parents should briefly explain saving for the future and investing while putting those dimes aside.

"And then you give them 70 cents and that's what they're able to spend. So from the first dollar they ever get they will learn not to live paycheck to paycheck and spend 100 percent of their money," she says.

There are other methods or systems for budgeting training wheels. For instance, Greg Karp, author of "The 1-2-3 Money Plan: The Three Most Important Steps to Saving and Spending Smart," recommends breaking money down into three components.

"I give my kid three Tupperware-type containers. One is labeled 'save' and one is labeled 'spend' and one is labeled 'give.' Every week I started them off with $5 -- $2 would go in spend, $2 would go in save and $1 would go in give and the $1 would be the one they take with them to church on Sunday, for example," he says.

Godfrey recommends a similar system, this one involving four buckets.

"Ten percent comes off the top for charity, to get them involved in the idea of giving at a young age," she says.

"The remaining 90 percent is divided into thirds. There is the cash jar for instant gratification. They worked hard, you want them to be able to spend some of their money, and then you're teaching them to make choices, but you set the overall parameters, like no candy or gum or automatic weapons," Godfrey says.

Another jar represents medium-term savings to teach them to push off gratification for a goal, and the last jar is for long-term savings such as college or a major purchase.

No matter how you slice it, there's a giving, a savings and a spending component.

Make and deal with spending decisions

"The spend bucket is where all the most valuable lessons are to be learned. They should spend that money regularly and deplete it. You want them to make mistakes with that money," says Karp.

"As parents, we're kind of hardwired to let our kids avoid making mistakes. But if they make little mistakes now, they can avoid making big mistakes later," he says.

The trick is not to bail them out when they realize that they've gone wrong. Ideally parents would start very young, as young as 3 years old and let them find out that bad spending choices can sting a little bit.

"Let them make impulse buys, that kind of thing. There is an opportunity cost and it teaches that money is finite. You really want them to regret some decisions because they won't forget them," says Karp.

Understand rewards of work

One is that it teaches kids to earn money, so you're teaching them to work hard, that money has to be earned and they get a glimpse of the employer-employee relationship within the allowance system.

The other side is that it's too easy for kids to challenge the chores-for-pay system, so earning and budgeting should be separate lessons.

Godfrey splits chores into two sets.

"There are citizen-of-the-household chores where they don't get paid. That is keeping your own personal space clean, picking up wet towels, getting up on time, brushing your teeth, making the bed," she says.

"And there are work-for-pay chores, so what you are also doing is teaching kids how a household works," Godfrey says.

The system Karp outlines in his book is similar, but he prefers to keep allowance separate from chores altogether.

"Keep the spending lesson separate from the earning lessons. You do need earning lessons and you can do that by offering a list of things the kid can do for extra money," he says.

"If you tie it too closely to the chores, you may have the kid who says, 'Well how much are you going to pay me to make my bed,' or just doesn't do it altogether. And then the whole system just crumbles," says Karp.

Additional chores can be offered for extra money so that kids learn to work for their pay -- and that way they can feel a little more in control of how fast they'll be able to save up for special purchases.

Delay gratification

Dividing savings buckets into long and short-term goals can also help kids realize that saving isn't just about spending at some point in the near future.

In Mackey's 10-10-10-70 system, the 70 for spending includes money that kids want to save for a short or mid-term goal.

It's not actually saving if they're just putting away money for something to spend on in a week or a month or whenever they have enough money, she says.

"They're not actually saving anything, they're just prolonging their spending," says Mackey.

Putting away money just for the sake of having a financial cushion is a routine that every person would do well to follow, and the earlier that concept sinks in, the better. It's a lesson that eludes many adults.

Build on budgeting

For instance, Mackey recommends figuring out how much you spend per month on children's nonessential expenses such as CDs, trips to the movies and cell phone bills.

"We've been doing a survey on this and finding that it can go from $25 to $400 a month for nonessential purchases that kids don't need to survive," she says.

She suggests that parents cover the necessities such as clothing, food, education and shelter and allow children to earn money for the extras that parents generally buy.

"You assign chores for that money and then when you go out into the marketplace they use their own money. I guarantee you that they will not spend their own money like they spend your money -- ever," Mackey says.

If kids can master these lessons on a small scale with their allowance, then they'll likely have the discipline and money skills to resist the lure of credit and living beyond their means later on as adults.